Short View: Cheaper currency

Short View: Cheaper currency
By John Authers, Investment Editor

Published: March 12 2009 18:05 | Last updated: March 12 2009 18:05

If the world is really following the script of the 1930s, then we are due for competitive devaluations, as nations attempt to make themselves more competitive at the expense of everyone else.

So the Swiss National Bank’s announcement that it is intervening to push down the Swiss franc sounds alarming. The speed with which the franc responded, dropping 3 per cent against the euro in a matter of minutes, also shows that if a central bank wants its currency to fall, it can deliver.

The problem is that not everyone can devalue at once – someone has to be left with an overvalued currency.

The SNB’s action does not necessarily herald such an outcome. The Swiss franc, like the Japanese yen, has been a “safe haven” currency, and thus had a perverse gain last year.

With inflation virtually zero already, an overvalued franc created a severe risk of outright deflation – something the SNB reasonably wants to avert. As it also cut rates and said it would buy bonds, this move has more to do with attacking deflation than with boosting Swiss trade.

Indeed, a cheaper franc is good news for eastern Europe. Their consumers had indulged in the Swiss franc carry trade, taking out mortgages denominated in Swiss francs. Since last July, the franc gained more than 50 per cent against the Hungarian forint, making those mortgages unbearable.

Thus, if anyone can pull off a deliberate devaluation without sparking ugly consequences elsewhere it may be the Swiss.

But the precedent of a central bank attacking its own currency is disquieting. The falls in industrial production and world trade suggest that everyone on the planet would like a cheaper currency.

This even includes China, which has allowed its currency to gain 26 per cent on a trade-weighted basis over the past four years, and seen its exports suddenly tumble.

john.authers@ft.com

(뉴욕=연합인포맥스) 김홍규특파원 = 금가격은 스위스중앙은행의 외환시장 개입으로 상승했다.

12일 뉴욕상업거래소에서 4월물 금가격은 전날보다 온스당 13.30달러(1.5%) 높아진 924.00달러에 마감됐다.

이날 스위스중앙은행인 스위스내셔널뱅크(SNB)는 스위스프랑화의 추가 평가절상을 막기 위해 스위스프랑을 매도하고 유로화는 매입하는 직접 개입을 시작했다고 밝혔다.

이는 세계 최고의 안전통화인 스위스프랑화의 가치 하락을 부추겼으며 이 같은 움직임은 일본 등 여타 국들에서도 나타날 것이라는 예상에 힘을 실었다.

뉴욕 애널리스트들은 모든 통화가 서로 평가절하되는 현상이 나타난다면 금이 최고의 통화자리를 차지할 가능성이 크다고 말했다.

이들은 SNB가 경기 부양을 위해 자국 통화 평가절상을 제한하는 첫 번째 G10 중앙은행이 됐으며 이는 일본 등 여타국들의 본격적인 외환시장 개입을 부추길 수도 있다고 우려했다.

kisme@yna.co.kr

(끝)

<저작권자(C)연합인포맥스뉴스. 무단 전재-재배포 금지.>