The swift rise of the Swiss Franc, driven by uncertainty surrounding US policy, may soon prompt the Swiss National Bank (SNB) to step in, as the country’s export-reliant industries hope to curb the currency’s surge before it inflicts further damage on a sector already strained by tariff threats.

So far this month, the Franc has climbed about 9% against the Dollar, marking its largest monthly gain since the 2008 financial crisis.

Just last week, it reached its highest value since January 2015, when the SNB abandoned its minimum exchange rate policy.

Furthermore, this surge has pushed the Swiss Franc up by 2.6% against the Euro in April, bringing it close to its highest level in over a decade.

However, the flight to the Franc, driven by market anxiety over US President Donald Trump’s unpredictable trade policies, threatens the central bank’s inflation target of 0–2%. The stronger currency lowers import prices, which could further suppress inflation that’s already hovering near zero, Reuters reports.

It also poses a challenge for Swiss exporters, already at risk of facing US tariffs as high as 31%, by making their products more expensive in international markets due to the stronger Franc.

“The rise of the Swiss Franc is the final ingredient for a poisonous cocktail for Swiss industry,” according to Jean-Philippe Kohl, vice director of industry association Swissmem.

“Companies are already struggling with weak demand abroad, the threat of massive American tariffs on Switzerland, and uncertainty caused by President Trump's trade policy.”

Swissmem has held back from explicitly calling for action from the SNB, but would support any measures the central bank takes to ease the Franc’s appreciation, according to Kohl.

Analysts suggest that currency interventions, rather than interest rate cuts, are likely the SNB’s most effective option at this point, especially with its key rate already at 0.25% and expected to decline further.

“If everybody is fearful and insecurity is high, nobody really cares about the interest rate in Switzerland,” stated Thomas Stucki, former head of asset management at the SNB and Chief Investment Officer at St Galler Kantonalbank.

Selling Francs to weaken the currency would mark a significant shift in strategy for the SNB. In 2023, the bank actually sold nearly 133 billion Francs in foreign currencies while purchasing just 1.2 billion Francs, aiming to strengthen the Franc in order to combat inflation.

However, currency interventions come with their own set of risks, most notably the potential backlash from the US. Washington previously labelled Switzerland a currency manipulator in 2020 during the Trump administration, a designation that could resurface if intervention resumes.

Moreover, what likely has policymakers most concerned is the Franc’s surge against the Euro, given that the majority of Swiss trade is conducted with eurozone countries.

This makes Euro-denominated imports especially influential on domestic inflation. In 2023, 57% of Swiss imports were invoiced in Euros, compared to just 13% in US Dollars.

While the SNB maintains that it bases its decisions on a broader basket of currencies rather than focusing on specific pairs, it has said that it will take necessary action to ensure inflation remains within its target range.