ZURICH (Reuters) – Swiss National Bank sold 132.9 billion Swiss francs ($149.51 billion) worth of foreign currency in 2023, the central bank said on Tuesday, signaling an increased focus on propping up the Swiss franc as a hedge against imported inflation.
The figure has risen significantly from the 22.3 billion francs in foreign currency sold by the SNB in 2022, as the bank began selling off some of its huge foreign exchange reserves.
The SNB’s strategy has paid off: inflation in Switzerland has been within the target range of 0-2% for the past nine months.
“The SNB’s foreign currency sales contributed to the initial appreciation of the Swiss franc roughly in line with inflation differentials relative to other countries,” the SNB said on Tuesday.
“They thereby prevented the Swiss franc from weakening in real terms and thus helped tighten monetary conditions,” it added. “By the end of the year, the inflation rate had dropped significantly.”
The SNB said it would no longer focus on selling foreign currency after achieving its goal. The central bank is due to announce its next monetary policy decisions on Thursday.
($1 = 0.8889 Swiss franc)