Has the Swiss National Bank been engaged in currency manipulation?

Thursday 5 February 2026

The decision by the United States Department of the Treasury to investigate whether the Swiss National Bank has engaged in currency manipulation reopens an old and uneasy debate about the boundary between legitimate monetary policy and covert economic statecraft. Switzerland, long accustomed to presenting herself as a neutral custodian of financial stability, now finds that neutrality questioned not in the realm of diplomacy or security, but in the foreign exchange markets.

At the centre of the American inquiry lies a familiar accusation: that Switzerland has intervened excessively in currency markets in order to suppress the value of the Swiss franc, thereby securing an unfair competitive advantage for her exporters. Under United States law, the Treasury is required periodically to assess the behaviour of major trading partners against a set of criteria that include persistent current account surpluses and sustained, one-sided intervention in foreign exchange markets. The Swiss National Bank has previously appeared on Washington’s watchlists, but the present investigation suggests a sharpening of tone, reflecting broader American sensitivity to trade imbalances in an era of geopolitical and economic strain.

From the Swiss perspective, the charge of manipulation is both unfair and incomplete. The Swiss franc has for decades functioned as a refuge currency, rising sharply whenever global uncertainty increases. Financial crises, pandemic shocks, wars on the European continent and turbulence in emerging markets all tend to push capital into Switzerland, often with destabilising speed. The Swiss National Bank has argued consistently that its interventions are defensive rather than mercantilist: designed to prevent excessive appreciation that would damage domestic price stability, push inflation into negative territory and undermine employment in export-oriented industries. On this reading, foreign exchange intervention is not a tool of competition, but a means of preserving macroeconomic balance in a small, open economy unusually exposed to global capital flows.

Yet this argument, however coherent, does not fully address American concerns. From Washington’s vantage point, intention matters less than effect. Large-scale purchases of foreign currency, particularly when sustained over time, alter trade dynamics regardless of their stated motivation. The United States Treasury’s framework does not require proof of malign intent; it assesses outcomes. In a period in which the United States is financing large fiscal deficits and seeking to reindustrialise segments of her economy, tolerance for partners whose policies appear to depress their currencies has diminished.

The investigation must also be understood in a wider international context. Global monetary coordination, already weakened after the financial crisis of 2008, has further eroded in the wake of the pandemic and the war in Ukraine. Central banks have pursued divergent strategies in response to inflation, energy shocks and capital volatility. In such an environment, the line between domestic stabilisation and international distortion has become increasingly blurred. Institutions such as the International Monetary Fund continue to advocate restraint and transparency, but their influence is limited where great powers perceive strategic economic interests to be at stake.

For Switzerland, the reputational stakes are significant. Her financial system depends heavily on trust, predictability and the perception of rules-based behaviour. Even the suggestion of currency manipulation risks undermining that image, particularly at a moment when Swiss banking has already faced international scrutiny over secrecy, sanctions compliance and governance. A formal designation by the United States would not trigger automatic sanctions, but it would expose Switzerland to diplomatic pressure and complicate her economic relations with a key partner.

At the same time the American position is not without its own contradictions. The United States Federal Reserve has, through quantitative easing and interest rate policy, exerted profound influence on global capital flows and exchange rates. Smaller economies often find themselves responding to American monetary decisions rather than shaping them. For Switzerland, intervention may be less an assertion of power than an attempt to survive within a system dominated by far larger actors.

Ultimately the Treasury’s investigation reflects a deeper tension in the international economic order. As geopolitical rivalry intensifies and economic security becomes entwined with national strategy, long-standing assumptions about acceptable monetary behaviour are being re-examined. Switzerland’s case illustrates the difficulty faced by small, financially open states whose currencies attract disproportionate attention in times of crisis. Whether the United States concludes that Swiss policy crosses the threshold into manipulation will matter less, in the long run, than the signal the investigation sends: that even the most stable and neutral of economies are no longer immune from suspicion in a world where money, power and politics have become inseparable.