Switzerland, US Agree to Avoid Manipulating Exchange Rates
Switzerland and the United States have issued a joint statement, committing to avoid manipulating exchange rates. This comes after the United States' scrutiny of Switzerland's foreign exchange policies. The Swiss National Bank (SNB) has also pledged to focus on price stability and not target rates for competitive purposes.
The joint statement acknowledged that intervention in foreign exchange markets can address excessively volatile or disorderly exchange rates. However, both sides agreed that macroprudential or capital flow measures should not target exchange rates for competitive purposes. This includes federal government entities like pension funds investing abroad.
The SNB, which abandoned its minimum exchange rate policy in 2022, shifting to a more flexible regime, reaffirmed its commitment. The bank pledged to keep its monetary policy focused on price stability and not target rates for competitive purposes. Switzerland's previous currency policies had led to it being labeled a currency manipulator under the Trump administration.
The joint statement reconfirmed both countries' commitment to avoid manipulating exchange rates under IMF Articles of Agreement. The United States, which had imposed a 39% tariff on Swiss exports in response to currency policies, and Switzerland, which had been on the United States' watch list since June, have now agreed to work together to maintain fair and stable exchange rates.
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