We all know who the most prominent complainers are since their complaints are loud and clear--Brazil, China, and so forth. However, Blanchard reminded all of us that the Swiss are also actively trying to manage their exchange rate. Not only do they fear a decline of export competitiveness, but they also have to deal with "organic" inflows as a consequence of being an international centre of finance. A few months ago, I featured Swiss foreign exchange intervention that was increasing in light of EUR/CHF slumping since its largest trading partner is the EU. As it turns out, the magnitude of Swiss action deserves more mention than we previously thought. Which, of course, is odd since (a) Switzerland is no Johnny-come-lately to industrialization, (b) we haven't heard much about it intervening, and (c) the Swiss franc is a reserve currency in its own right. Chalk this one up to keeping your trap shut and avoiding others' ire in the process. Also chalk it up to long Swiss experience managing money discreetly. Some things never change.
Anyway, Reuters has these bullet points to offer. Let's just say the Swiss aren't too happy with the current state of affairs. What's more, Swiss National Bank actions with respect to re-entering the FX markets are contingent on what Japan will do:
- Cenbank spent nearly 200 billion Swiss francs via interventions from March 2009
- Interventions stopped in June of this year
- Traders speculate Japan move could prompt SNB to resume intervention
- Swiss franc flirting with parity against dollar