The SNB’s exchange rate policy comes alive

The SNB has acknowledged that foreign exchange market interventions are a full‐fledged
monetary policy tool. Indeed, well‐timed interventions have contributed to achieving one
of the world’s lowest inflation rate in 2022 and 2023. Both the use of the instrument and
its recognition in the monetary policy concept are welcome, but important questions
remain:

1. When and how are exchange rate or intervention decisions made?
2. What is the relationship between the interest rate tool and the foreign exchange
   intervention tool?
3. Does the SNB have a target for the exchange rate?
4. What is the role of the size of the balance sheet?
5. Does political pressure from other central banks constrain the SNB from using
   the foreign exchange interventions as a tool?
6. Should the SNB publish more intervention data?