The export share of the Swiss gross national product (GNP) amounts to approximately 42%, while the corresponding share is 29% in Germany and only 12% in the United States. Switzerland's major trading partners are the EU countries, which absorb 59% of Swiss exports. With regard to imports, the interdependence is even greater: 75% of Swiss imports come from the EU. Via foreign trade, the exchange rate exerts an influence on aggregate demand and, therefore, also on the price level in Switzerland. In addition, the exchange rate directly affects import prices. Therefore, exchange rate movements have been, and will be, closely monitored by the SNB. The rapid succession of interest rate cuts by the National Bank since 11 September 2001 was also an expression of concern about an exchange rate-triggered threat to the economy. Since price stability was not jeopardised, it was possible to considerably relax monetary policy. 4.3. Steering the exchange rate? Although the SNB takes account of the exchange rates when determining its monetary policy, it is sometimes called upon to do more than that. It is even requested to concentrate – at least temporarily – exclusively on the exchange rate. The underlying notion is that the National Bank could aim at a lower Swiss franc exchange rate and that exports would consequently pick up to the desired degree. Theoretically, it is possible to weaken the franc in nominal terms by conducting a highly expansionary monetary policy.
Niklaus Blattner: The euro - implications for Switzerland and for the monetary policy of the Swiss National Bank Speech by Professor Niklaus Blattner, Member of the Governing Board of the Swiss National Bank, at the Banking Studies Center Colloquium, Lugano, 22 October 2002. * 1. *  *  Introduction  Where do we stand more than three and a half years after the launch of the European Economic and Monetary Union (EMU) and almost ten months after the introduction of euro notes and coins? On the whole, from the perspective of the Swiss National Bank (SNB), the experience with the euro has been primarily positive so far, even though the Swiss franc has somewhat appreciated against the euro since 1999. First of all, Switzerland is now surrounded by a large currency area that pursues similar goals in terms of monetary policy, and, in particular, with respect to price stability. Competitive currency devaluations are no longer an option for members of the euro area, and the exchange rate volatility of the Swiss franc vis-à-vis the currencies of the European trading partners has declined considerably. For Swiss enterprises, foreign currency management has become easier. Apart from decreasing transaction costs, Swiss firms also benefit from enhanced price transparency and competition in Euroland. At the same time and despite some initial fears to the contrary, Switzerland has been able to retain its advantage of lower interest rate levels.