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The Swiss franc reached parity with the euro on Monday, but data from the country’s central bank suggests policymakers are unlikely to be concerned. The Swiss Franc at Euro parity indicates that the Swiss National Bank’s interventions are only muted. 

Last week’s sight deposit figures showed a 0.07 percent increase to 725.7 billion francs ($785 billion), implying that the Swiss National Bank only intervened marginally to halt the currency’s appreciation against the euro. 

The increase is modest, indicating that the SNB has not intervened significantly in the last few days. It has a lot to do with the franc’s appreciation against the euro rather than other currencies.

Last month, the franc gained about 1.2 percent against the euro, aided by haven flows following Russia’s invasion of Ukraine. Furthermore, the European Union’s high exposure to the Russian economy has harmed the common currency. Earlier Monday, data showed that the SNB’s foreign-currency reserves fell by 8.4 billion francs ($8.7 billion) in February to 938.3 billion francs. This is most likely due to the franc’s appreciation that month. 

Currency interventions, along with the world’s lowest interest rate, are part of the SNB’s policy approach. While the Fed reiterated its willingness to intervene on Monday, it also stated that it “considers the overall currency situation,” with individual currency pairs not playing a “special role.”

The euro-franc pair has continued to fall this month, reaching parity in early trade Monday for the first time since the SNB lifted its cap on the franc’s value against the euro in 2015. At 10:57 a.m. in Zurich, it was trading at 1.0048 per euro. 

It’s a difficult situation for the SNB. The franc/euro parity has reached a psychological tipping point. On the other hand, the case for monetary policy easing is weak because of the inflation outlook and the growth outlook, both of which are favourable due to the reopening of the Swiss economy” following the omicron surge..