“Switzerland does not manipulate money!” The Swiss newspaper Cash reported on the 17th that the U.S. government listed Switzerland and Vietnam as “currency manipulators” the previous day, which was another attack on international trading partners. Mario Thor, spokesman of the Swiss Federal Department of International Financial Services, rejected the accusations of Swiss exchange rate manipulation by the U.S. government in an interview with the Swiss Financial News Agency on the 17th and said that Switzerland would start talks with the United States on the matter.
This is the first time that Switzerland has been listed as a “currency manipulator” in an official report of the U.S. government. Reuters said on the 17th that the three conditions for the United States to define a “exchange rate manipulator” include: the trade surplus with the United States exceeds $20 billion/year, foreign exchange intervention exceeds 2% of gross domestic product (GDP), and the global current account surplus exceeds 2% of GDP. The coronavirus pandemic has distorted trade flows and widened the U.S. deficit with trading partners.
The Swiss Central Bank also said that it would maintain monetary policy without manipulating its currency, and stressed that it was “still willing to intervene more strongly in foreign exchange markets”. The United States listed Switzerland as an exchange rate manipulator once pushed the Swiss franc up against the dollar. Foreign exchange strategists said that the move may make it slightly difficult for the Swiss Central Bank to intervene in the market, and the easing of the coronavirus epidemic will ease the upward pressure of the Swiss franc to hedge.
On the 17th, Swiss newspaper Neuzurich quoted Thomas Judan, Governor of the Swiss Central Bank, as saying that the Swiss franc has a “safe haven” role. The Swiss Central Bank has long supported the important export economy by intervening in the money market. The accusations of the United States will not shock Switzerland immediately. First of all, this process is driven by the government that will soon leave office. Secondly, the standards defined by the United States do not meet the characteristics of Switzerland. For example, Switzerland’s high current account surplus mainly reflects the high savings rate, rather than currency undervalued.
On the same day, the Central Bank of Vietnam said that it would cooperate with the U.S. authorities to ensure a “harmonious and fair” trade relationship. Reuters said on the 17th that the Central Bank of Vietnam said in a statement that Vietnam’s trade surplus with the United States was the result of “Vietnam’s economic particularity”. Vietnam’s monetary policy is not aimed at creating an unfair trade advantage.