Forex glossary
SNB Intervention (Swiss National Bank)
SNB intervention is Swiss National Bank activity in FX markets to pursue its price-stability mandate. It may buy or sell foreign currency against CHF, so it does not always mean weakening the franc. The former EUR/CHF 1.20 floor ended on 15 January 2015; that historical level is not a current guarantee.
Illustrative example
How does it work in practice?
In a hypothetical intervention, the SNB sells foreign currency and buys CHF to tighten monetary conditions. This differs from buying foreign currency with francs; not every intervention aims to weaken CHF.
A case to work through
Two possible operations
In a fictional table, operation A buys EUR with CHF and B buys CHF with EUR.
- In A, the bank delivers CHF and receives EUR.
- In B, it delivers EUR and receives CHF.
What follows? Describe the side using the operation document.
Example boundary: This proves neither actual execution nor a currency response.
A useful distinction
SNB Intervention (Swiss National Bank) / Central Bank Rate Decision
Rate decisions and FX interventions are distinct central-bank tools.
Check your understanding
Read an operation's side without assuming a permanent floor.
Show the answer and explanation
Receives CHF and delivers EUR
Those sides match the operation.
Rates, exposures and market measures
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Read the fuller explanation
Sources and documentation
- How does the SNB keep inflation on track? – Swiss National Bank
Describes buying or selling foreign currency against CHF as distinct policy operations.
Document read: - snb.ch
- snb.ch
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.