U.S. Should Cut the Swiss Some Slack on Currency Manipulation
What can the country do but try to keep a lid on the franc? The alternatives are unthinkable.
Between a rock and a hard place.
Photographer: Athanasios Gioumpasis/Getty Images EuropeThe Swiss have come clean. There is no use denying that the Swiss National Bank has been intervening heavily to keep its currency from rising. By selling the equivalent of $100 billion worth of Swiss francs in the first half of this year, they’ve landed in the crosshairs of the U.S. Treasury, whose semi-annual currency manipulator report is due shortly.
In January the U.S. put Switzerland on a watchlist of countries allegedly gaming their exchange rates. One of the tripwires is spending in excess of 2% of gross domestic product on currency market intervention — and the SNB has already exceeded that nearly four times this year.