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 Migeru - Aug 24 6 comments
by Melanchthon - Aug 23 8 comments
by Frank Schnittger - Aug 18 60 comments
by Frank Schnittger - Aug 6 117 comments
by gmoke - Jul 29 8 comments
by Frank Schnittger - Aug 3 19 comments
by ARGeezer - Aug 5 4 comments
by ARGeezer - Jul 29 17 comments
by Migeru - Aug 246 comments
by Melanchthon - Aug 238 comments
by Frank Schnittger - Aug 1860 comments
by Frank Schnittger - Aug 6117 comments
by gmoke - Aug 5
by ARGeezer - Aug 54 comments
by Frank Schnittger - Aug 319 comments
by Democrats Ramshield - Jul 303 comments
by gmoke - Jul 298 comments
by ARGeezer - Jul 2917 comments
by Frank Schnittger - Jul 2869 comments
by gmoke - Jul 282 comments
by Democrats Ramshield - Jul 2634 comments