Swiss National Bank denies currency manipulation after being put on US watch list
The Swiss National Bank (SNB) said on Friday it would intervene in foreign currency markets where necessary to keep inflation on track after the US added Switzerland to a list of countries being monitored for unfair currency and trade practices.
The SNB denied being a currency manipulator after the publication of the US Treasury Report on Thursday, but said it would continue to act in Switzerland's interests as the strong franc helped push inflation into negative terrain last month.
"The SNB does not engage in any manipulation of the Swiss franc," it said. "It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy."
The SNB said it was in contact with US authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions if necessary to pursue its inflation target of 0-2 per cent.
Swiss inflation hit a four-year low in May, with prices falling by 0.1 per cent.
The SNB declined to say whether further talks with the United States were planned, but said its monetary policy was "geared towards the needs of Switzerland".
Switzerland met two of the US Treasury's concerns regarding trade flows and its current account, but not on foreign currency interventions. SNB forex exchange purchases in 2024 were "minimal," Treasury said.
In 2024, the SNB bought only $1 billion in foreign currencies, equivalent to only 0.1 per cent of Swiss GDP, well below the Treasury's threshold of 2 per cent of economic output.
The US has also added Ireland to the list, along with previous countries, including Germany, China, Japan, South Korea, Singapore, Taiwan and Vietnam, already being monitored at the time of the November report from the Biden administration.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Gulf Today
9 hours ago
- Gulf Today
How big of a threat is Asian superpower China really?
Daniel DePetris, Tribune News Service Last June, during an annual security conference in East Asia, then-Defense Secretary Lloyd Austin underscored that the United States was not seeking conflict with China. Maintaining a consistent dialogue with Beijing, he hinted, was just as vital to effective deterrence as ensuring the US military was fully equipped and prepared. Fast-forward a year later and the message from Washington is far different. Unlike his predecessor, Defense Secretary Pete Hegseth name-dropped China in his speech to the same security conference multiple times, as if to shame the Asian superpower for running roughshod over the so-called rules-based international order. China, Hegseth warned, was trying to become a hegemon in Asia, where it could dominate its neighbours, exploit the South China Sea's vast natural resources and coerce other countries into accepting Beijing's demands. In Hegseth's words, 'It has to be clear to all that Beijing is credibly preparing to potentially use military force to alter the balance of power in the Indo-Pacific.' An invasion of Taiwan, he added, could be 'imminent.' If this all sounds scary, that's because it is. His comments raise the rhetorical gamesmanship to a level US officials weren't comfortable with in the past. The Biden administration was no slouch on China policy, but it still didn't want to inflame things unnecessarily. The Pentagon, for instance, repeatedly emphasized that while China's military drills around Taiwan were aggressive and designed to wear down the island's will to resist, a conflict in the Taiwan Strait was 'neither imminent nor inevitable.' In other words, there was still an opportunity to defuse any tensions before they exploded into a war that could drag the United States in, kill tens of thousands of people and throw a heavy wrench into the global economy. The Trump administration, however, has deployed noticeably sharper words during its first four months. Although the fundamentals of its wider policy in East Asia mimic the Biden administration's own — reinforcing US alliances; engaging in regular freedom of navigation exercises with Japan and the Philippines; and stressing the utility of preserving the status quo in the Taiwan Strait — Trump's advisers aren't afraid of poking Beijing in the eye. If managing the systemic rivalry with Beijing was a core component of Washington's overall strategy throughout Biden's four years, it increasingly looks like the guardrails that were put in place to prevent miscalculations are now eroding. Even so, does the Trump administration have a point? Is a conflict over Taiwan imminent as Hegseth suggests? And how real is the risk of China becoming Asia's hegemon? First, we should acknowledge that China is a threat in certain respects, particularly to its neighbors who have competing jurisdictional claims. The People's Liberation Army, or PLA, is arguably the strongest military in the region today, a consequence of Chinese President Xi Jinping's long-standing policy of pouring money into its coffers to fund a large-scale modernization campaign. China spent $314 billion on defense in 2024, a 7% increase from the year prior and a whopping 59% increase from a decade ago. The PLA boasts the largest ballistic missile arsenal in Asia and continues to invest in hypersonic missiles, which are difficult for conventional air defenses to intercept. The PLA is also throwing out the old rulebook that used to govern affairs in East Asia. As I mentioned last week, the median line that once served as an unofficial boundary separating Chinese and Taiwanese airspace is now imaginary as the Chinese air force flies closer to the self-ruled island to test Taiwan's defenses and wear down morale. Yet the United States would be wise to refrain from overestimating China's military capability and underestimating the capability of its allies like Japan, the Philippines, South Korea and Australia — all of whom have an even greater interest in preventing Chinese hegemony in Asia than Washington does. China is its own worst enemy in this regard: The more it presses its territorial claims, the more incentive its neighbors have to balance Beijing. For the most part, this is exactly what China's neighbours are doing. Japan is the most obvious case study. Traditionally a pacifist country that kept to an artificially low defense budget relative to its wealth, Japan has spent the last three years adding resources to its so-called Self-Defense Forces and buying American weapons off the shelf. Tokyo's latest national security strategy, unveiled in 2022, was a sea-change in how Japan typically talks about its security environment. In that document, China was called out for challenging the international order, partnering with Russia in its war against Ukraine and trying to change the region's status quo by force. Japan's defense budget is set to double by 2027, and with more resources comes a greater capability to preserve the balance of power. The Philippines is another example. While the country can't possibly compete with China in conventional terms, the Philippine government under President Ferdinand Marcos Jr. has effectively given up on rapprochement with Beijing and thrown in its lot with Washington. China's incessant clashes with Philippine forces in the South China Sea have served as a wake-up call to a country whose previous administration under Rodrigo Duterte (who is now in custody at the Hague for war crimes) drifted into the Chinese camp and took a more suspicious view of US intentions. Today, Manila is not only buttressing its navy and coast guard but also increasingly partnering with countries like Japan and Australia who have a similar threat perception about China.
Dubai Eye
21 hours ago
- Dubai Eye
Swiss National Bank denies currency manipulation after being put on US watch list
The Swiss National Bank (SNB) said on Friday it would intervene in foreign currency markets where necessary to keep inflation on track after the US added Switzerland to a list of countries being monitored for unfair currency and trade practices. The SNB denied being a currency manipulator after the publication of the US Treasury Report on Thursday, but said it would continue to act in Switzerland's interests as the strong franc helped push inflation into negative terrain last month. "The SNB does not engage in any manipulation of the Swiss franc," it said. "It does not seek to prevent adjustments in the balance of trade or to gain unfair competitive advantages for the Swiss economy." The SNB said it was in contact with US authorities to explain Switzerland's economic situation and monetary policy, and would continue to use interest rates and forex market interventions if necessary to pursue its inflation target of 0-2 per cent. Swiss inflation hit a four-year low in May, with prices falling by 0.1 per cent. The SNB declined to say whether further talks with the United States were planned, but said its monetary policy was "geared towards the needs of Switzerland". Switzerland met two of the US Treasury's concerns regarding trade flows and its current account, but not on foreign currency interventions. SNB forex exchange purchases in 2024 were "minimal," Treasury said. In 2024, the SNB bought only $1 billion in foreign currencies, equivalent to only 0.1 per cent of Swiss GDP, well below the Treasury's threshold of 2 per cent of economic output. The US has also added Ireland to the list, along with previous countries, including Germany, China, Japan, South Korea, Singapore, Taiwan and Vietnam, already being monitored at the time of the November report from the Biden administration.
Arabian Post
2 days ago
- Arabian Post
A sordid tale of the Blackstone IPO and a jailed NRI private bankster!
Matein Khalid I have had a neurological soft corner for Wall Street's alternative asset manager stocks ever since I resisted the come hither importunings of multiple Morgan Stanley (MS) managing directors before the firm sold its private wealth division in the DIFC to Credit Suisse. Everyone of these MS honchos wanted me to subscribe to the Blackstone IPO in the summer of 2007 at $32. They assured me that the biggest institutional investors in the UAE had all subscribed to the IPO and I was even excluded from a dinner with Stephen Schwartzmann, Blacktone's founder and chairman, since I refused to give MS an order for a $50 million IPO bid. By the summer of 2007, I was convinced that the world was headed into a traumatic global recession and even published an article in English which would have saved my fellow Dubai investors billions of dollars had they bothered to read it for free in the Khaleej Times as far back as January 2007. This article accurately predicted the global financial meltdown a year before it happened and is uploaded above. ADVERTISEMENT Naturally, these Morgan Stanley private bankers despite their fancy titles of MD, Imperial Wizards, King of Kings and Chief Concubine were clueless about the nuances of the global capital markets. I have learnt the hard way that the private banking and wealth business in the Middle East is really the blind leading the blind to the slaughterhouse, invariably with high octane leverage and absurdly high fees for the privileges of helping you gut your financial net-worth in the capital markets they barely understand. I sealed my unpopularity with Morgan Stanely's pinstriped bureaucrats in Dubai when I wrote successive articles, listing myriad reasons why I wanted to short both Morgan Stanley and Blackstone at 32. History or a cursory look at your smartphone will record that MS almost failed in the post Lehman Wall Street panic and the Blackstone IPO plunged from 32 to 4. To compound the insult that Dubai's top NRI investors faced as they haemorrhaged money on the advice of the MS clowns, the top Indian broker on the MS bench (Manoj Prasad) was jailed for fraud, money laundering and trying to bribe a CBI officer in India. So much for Wall Street/Swiss due diligence/ethics when it comes time to fleece the leveraged NRI lambs in the Gulf. My readers know I wrote successive columns in the UAE/British media recommending investors buy Blackstone (BX) shares at 10-12 when the distribution yield was 9%. I even recommended in writing to the chairman of the royal investment office where I was CIO not to allocate $25 million to Abraaj Capital for a board seat that meant squat at 3.5X book value when he could invest in Blackstone at $10 a share, way below book value. That $25 million went to money heaven when Abraaj failed in 2018 after Arif Naqvi's criminal fraud. Blackstone shares I recommended rose from $10 in 2010 to as high as $200. So that $25 million in Abraaj's eternal money heaven would be valued at $500 million if my poor chairman who had never heard of Steve Schwarzman but Magu, our Group CFO, a Karachi accountant, was dazzled by the intellectual brilliance of Arif Naqvi, the Gulf media's financier of the millennium. Moral of the story? If you think Wharton is expensive, try ignorance! Blackstone is now the planet's biggest alt asset manager with $1.2 trillion AUM and is valued at $167 billion on the NYSE. I am a nervous long at $136 since I believe the US private credit market will be gutted in a recession that is now inevitable in Q3, the reason why I went long up the wazoo on TLT at 84 as I expect JayPo to capitulate on rate cuts at the September FOMC. I want to exit my BX long via a covered call strategy before July 4th, our Independence Day. I am pretty sure I will be able to buy BX below 100 when the macro wolf finally swallows Grandma Goldilocks. We saw this movie before in the autumn of 2008 ADVERTISEMENT Also published on Medium. Notice an issue? Arabian Post strives to deliver the most accurate and reliable information to its readers. If you believe you have identified an error or inconsistency in this article, please don't hesitate to contact our editorial team at editor[at]thearabianpost[dot]com. We are committed to promptly addressing any concerns and ensuring the highest level of journalistic integrity.
