The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
But (a) simply defending the existing exchange rate is neither inflationary nor deflationary and (b) they can't seriously affect our trade-weighted exchange rate even if they were to try. The Swiss Franc simply isn't a big enough currency. Any Franc/-Mark exchange rate movement large enough to appreciably influence the Eurozone trade-weighted exchange rate is also large enough to cause politically unacceptable dislocations in Switzerland. And since the Swiss Franc is the currency under upwards pressure at the moment, the Swiss CB can always curtail such disruption.
It will be more interesting to see what happens if the Swiss CB fails to use the current upwards pressure to accumulate sufficient hard currency reserves to cover the inevitable exit from the Swiss Franc when the immediate panic subsides. Because then they will be defending against a potentially substantial depreciation of their currency.
Friends come and go. Enemies accumulate.
by joelado - Oct 20 7 comments
by Frank Schnittger - Oct 19 18 comments
by Frank Schnittger - Oct 16 7 comments
by Frank Schnittger - Oct 14 1 comment
by Frank Schnittger - Oct 5 113 comments
by DoDo - Oct 2 10 comments
by gmoke - Sep 27 9 comments
by joelado - Oct 207 comments
by Frank Schnittger - Oct 1918 comments
by Frank Schnittger - Oct 167 comments
by Frank Schnittger - Oct 141 comment
by Frank Schnittger - Oct 5113 comments
by DoDo - Oct 210 comments
by gmoke - Sep 279 comments
by gmoke - Sep 25
by Frank Schnittger - Sep 17162 comments