The Swiss National Bank (SNB) plans to take further foreign exchange interventions to deal with an overly strong Swiss franc. However, central bank president Thomas Jordan does not see a further rate cut at the moment as the primary instrument for combating the high valuation of the currency, which is harmful to the country’s export economy.
“If necessary, we still have room to maneuver, but we are now focusing on foreign exchange intervention to limit the pressure on the Swiss franc,” Jordan said in an interview with the Tribune de Geneve newspaper available on Saturday evening.
The largest recession triggered by the corona crisis since the Great Depression of the 1930s led to “enormous upward pressure” on the Swiss currency, which is considered a safe haven for many investors, Jordan said in a previously published interview with the “Sonntagszeitung”. The Swiss franc gained against the euro, but the multi-billion euro interventions would have had a major impact. “Without the National Bank’s monetary policy, we would see a completely different franc exchange rate in the current situation,” he said.
He sees no alternative to the continuation of the current ultra-loose monetary policy. “It is really not the case that we are happy about the negative interest rate,” said Jordan. “We’ll pick it up as soon as circumstances make it possible.” But the negative interest rate of minus 0.75 percent is currently necessary to avert greater damage to the country.
Source: Apa / Ag.
–
