Martin Schlegel
Martin Schlegel

Everyone in the market would love if central banks would try for another EUR/CHF-style peg. What a wild time that was. It helps to explain why Japan has been so cautious in intervening with the yen.

Comments from Schlegel:

  • Without forex sales, SNB would have had to raise interest rates higher
  • Forex purchases in past have also helped head off deflation
  • Forex intervention complements interest rate policy
  • Central bank only uses FX intervention when necessary

Schlegel is likely to take over the Chairman position from the retiring Thomas Jordan. It looks like FX intervention won't be going anywhere with the switch.