Swiss industries are calling on the country’s central bank to shift its focus from combating inflation to addressing the challenges posed by the strong Swiss franc, Reuters reported on Monday.
The currency’s significant appreciation against the dollar and euro over the past year is impacting profits as the global economy slows and demand decreases.
As the Swiss National Bank (SNB) prepares for its next interest rate decision on March 21, industries are urging it to consider the economic situation and mitigate the effects of currency shocks. This comes after the SNB has successfully kept inflation within a 0-2 per cent range.
Stefan Brupbacher, director at Swissmem, which represents major manufacturers like ABB, Siemens, and Schindler, emphasised the need for the SNB to consider the export industry’s situation.
The Swiss industry is currently in a delicate state following the sharp appreciation of the franc in late 2023. Martin Hirzel, a board member at farm machinery maker Bucher and president at Swissmem, highlighted that the franc’s strength arrived at an inopportune time as companies struggled to secure new orders after a weak 2023.
The appreciation of the franc against the euro by 5 to 7 per cent has made Swiss products more expensive, leading to shrinking company margins. Swissmem reported a 9.1 per cent drop in foreign orders last year, and the Swiss manufacturing index has been in contraction for a year.
