ZURICH: Pressure is rising on the Swiss National Bank to take further action to soften the Swiss franc, a newspaper reported on Sunday based on a poll of Swiss people it had commissioned.
According to the SonntagsZeitung, 63 percent of those questioned wanted the central bank to wage new currency interventions, even if this were to lead to higher inflation down the road.
The poll also showed 27 percent of respondents wanted the SNB to set an exchange rate target of the franc to the euro, of 1.15 or 1.20 francs per euro.
Urs Schwaller, an MP of the centre-right Christian Democrats (CVP), said the SNB should keep the franc weaker than 1.13, while Fulvia Pelli, head of the liberal Free Democrats, said the SNB should not announce a target, so as not to be overwhelmed by speculators, the paper reported.
With exports beginning to fall off and company profits under pressure, both the SNB and the government are under increasing pressure to do something about the currency, which has climbed some 20 percent against the euro and the dollar in recent months.
The SNB intervened in the spot currency market in 2009 and 2010 and ran up its biggest annual loss ever as a result, prompting calls for Chairman Philipp Hildebrand to resign. This has made another round of interventions controversial.
To try to weaken the franc, the SNB on Aug. 3 slashed its already low interest rate target to zero and has greatly expanded the cash it makes available to banks, but has so far not stepped into the spot market again.
The Swiss government last week announced a 2 billion franc package to help soften the blow to the economy. The scheme provides for a temporary reduction in social security contributions and higher funding for the tourism sector.
According to the newspaper poll, 56 percent said they basically supported the government's decision to extend fiscal support.
Yet the governmental scheme was sharply criticised by political elites at the weekend.
Both the CVP and the right-wing Swiss People's Party (SVP) said it set the wrong incentives, the SonntagsZeitung said.
Christian Levrat, head of the Social Democrats (SP), meanwhile said only firms that were not cutting jobs, reducing wages or paying out dividends should get state aid, the Sonntagszeitung also reported.
Copyright Reuters, 2011
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