The Swiss National Bank's (SNB) franc cap has restored stability but the currency's level is still a problem for exporters and the central bank should try and weaken it further, the head of a leading business group said on Wednesday.
Along with three trade union heads, Swissmem President Hans Hess told SNB governing board alternate member Thomas Moser in a meeting last week that the franc remained some 10 percent overvalued and could further threaten jobs and competitiveness.
"We're very happy with this cap at 1.20 (to the euro) because it has restored a certain stability. But the Swiss franc is still 10 percent overvalued at 1.20," Hess told Reuters in an interview.
"This problem hurts exporters and we expect the central bank to not only defend this 1.20 (level) but to try to weaken the franc when possible." Hess did not specify what measures the SNB could use, but said there were many possibilities, noting the SNB boosted liquidity by expanding banks' sight deposits in August.
To tame the runaway franc that spiralled to records against both the dollar and the euro earlier this year as investors sought a safe haven, the SNB set a cap of 1.20 franc to the euro in September and vowed to defend it using all necessary means.
Swissmem, which represents the metals, electronics and machinery sectors, held off making demands for the SNB to shift the cap. "We'll leave the type of measures to the SNB. Its independence is very important. But when they take decisions they must be well informed of what's happening to industry," Hess said.
Comments
Comments are closed for this article.