ZURICH: The Swiss National Bank is ready to take more action if economic developments and deflationary risks make this necessary, the central bank's vice they will take more action if necessary.
Thomas Jordan said in an interview with Swiss newspaper SonntagsZeitung the cap had lowered the risks for the economy as well as easing deflationary pressure.
"But I would like to remind people that since Sept. 6 we have said that we chairman was quoted as saying on Sunday as he warned the Swiss economy could stop growing.
The SNB introduced a cap of 1.20 francs per euro on Sept. 6 to protect the economy and stave off deflation and policy makers have repeatedly said are ready to take more action, should the economic perspective and the deflationary risks require this," Jordan said.
Jordan also warned Switzerland's economy was heading into a tough period.
"The Swiss economy is now entering into a difficult phase with low or possibly slightly negative growth rates. The franc is still at an elevated level. On top of this, the world economy is also slowing down," Jordan said.
There has been speculation the SNB might be ready to shift the cap as data shows the economy slowing and Swiss politicians and exporters have demanded the SNB try to weaken the franc further as companies shed jobs.
Jordan, who has previously said the SNB will not give into pressure from business and politicians to shift its cap on the franc, said in the interview he could understand to an extent calls for the cap to be moved.
The Swiss franc has traded in a range of 1.20-1.25 francs per euro since the SNB capped the currency.
Jordan also said the SNB expects the franc to weaken in the longer term.
Comments
Comments are closed for this article.