Swiss franc, commonly considered to be the so-called safe haven, increases in value in situations of market uncertainty, which has negative consequences for the Swiss economy. In the past, in such situations, the SNB, the equivalent of the Polish National Bank, intervened in the market to weaken the currency. However, intervention now would risk another dispute with the Donald Trump administration, which accuses Switzerland of unfair practices.
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“Readiness to intervene has increased.” Switzerland has fallen in favor of Donald Trump
The Swiss National Bank (SNB) announced on Thursday that it is keeping its main interest rate at 0%, as expected. Policymakers further stated that “given the conflict in the Middle East, the Swiss National Bank's readiness to intervene in the currency market has increased“.
“The SNB thus prevents a sudden and excessive appreciation of the Swiss franc, which would threaten price stability in Switzerland,” they added.
Dispute with the US or disinflation. Switzerland has a problem with the franc
The Swiss franc has appreciated in value due to general market volatility. Last year, uncertainty caused the franc to strengthen against the US dollar and against regional currencies, the euro and the British pound.
Is that bad? The strong franc puts deflationary pressure on the Swiss economy, which briefly entered a phase of disinflation last year, which threatens the country's exports.
In an interview with CNBC on Thursday, SNB President Martin Schlegel said that the management of the central bank wants to stop the excessive appreciation of the franc to ensure price stability in Switzerland.
“We analyze monetary policy and make decisions on the use of our tools, i.e. interest rates and currency interventions,” he said.
Asked whether the rest of the world understood that the SNB's motivation for intervening in the currency market was to stabilize prices, not to gain a competitive advantage (a weaker currency makes exports more affordable for foreign buyers) – Schlegel reiterated that The SNB “intervened in the foreign exchange market solely for monetary policy reasons” and not to create an unfair advantage for Swiss exporters.
See also: CHF/PLN exchange rate March 19, 2026
Donald Trump will not be pleased. Getting closer to intervention in the “safe haven”
With annual inflation in Switzerland standing at just 0.1%, any interest rate cut to cool the franc would bring back the unpopular negative interest rates that have been in place for seven years until 2022.
Alternatively, policymakers can sell Swiss francs and buy foreign currencies – usually euros, but sometimes dollars.
See also: Currency rates. Donald Trump's “blacklist” does not help. The central bank is in a bind
However, under President Donald Trump The US aggressively attacked the SNB's currency intervention strategy.
Switzerland-USA dispute
Last year, the U.S. Treasury added nine economies to its “Monitoring List” of trading partners “whose monetary practices and macroeconomic policies deserve special attention.”
The United States imposed a 39 percent tariff on Switzerland last year.one of the highest imposed on any country, which the White House attributed to “currency manipulation and trade barriers.”
At the end of last year, Switzerland concluded an agreement with the US to reduce customs duties to 15%. But even after the Supreme Court invalidated Trump's tariffs, the country came under U.S. investigation again.
Last week, a Section 301 investigation was launched against 16 trading partners. If it shows that Switzerland's practices are “unreasonable or discriminatory and burden or restrict trade with the United States,” the United States would have the power to impose new tariffs or other import restrictions on the country.
Source: CNBC
