(01.02.2023) Businesses are wary of the economic outlook. According to Credit Suisse's currency survey, which polled more than 1,000 companies, almost one in two entrepreneurs has hedged at least partially against exchange rate risks.
The business community expects the franc to rise slightly against the euro but anticipates a depreciation against the dollar. The euro remains the most important foreign currency for Swiss companies: 49% say that they purchase most of their goods in euros.
By contrast, in the services sector, sales transactions are mainly settled in francs (55%), with the euro being slightly more prevalent in the industrial sector (40% and 43% of sales are in euros and francs respectively). Furthermore, one in ten companies designates the dollar as their main sales currency.
In terms of foreign exchange risks, 44% of respondents said they had at least partial coverage, an increase of 4 points compared to the previous year. The industry sector is generally slightly better covered (45%) than the service sector (41%). Companies that hedge against currency risks often also hedge against interest rate risks. According to Claude Maurer, Chief Economist at Credit Suisse, some companies "protect themselves as much as possible against financial risks", while others no longer consider these risks to be a "priority".
Businesses have shown caution at the beginning of the year: half of them expect growth to slow in 2023 and are counting on the Swiss National Bank (SNB) raising its key interest rate by a small 0.25 percentage point to 1.25%.
According to the survey's authors, nearly 9 out of 10 companies are not hedged against interest rate risks, although risk hedging is "gaining in importance" amid the abandonment of negative rates and the risk of a further rise.
Last modification 01.02.2023
