ZURICH: The Swiss National Bank will continue to enforce its franc cap versus the euro with the utmost determination and remains prepared to buy foreign currency in unlimited quantities, one of the central bank's governing board members said.
"The current course of Swiss monetary policy, particularly the decision to introduce a minimum exchange rate, is the result of a deep-rooted consensus," Jean-Pierre Danthine said in the wake of former Chairman Philipp Hildebrand's resignation on Jan. 9 over a currency trade by his wife.
"The SNB will thus continue to enforce the minimum rate with the utmost determination and remains prepared to buy foreign currency in unlimited quantities," said Danthine, speaking at a conference in Zurich on Tuesday.
"The Swiss franc is still highly valued, but it should depreciate further in the future," he said.
The SNB, whose mandate is to maintain price stability, capped the red-hot Swiss franc, which almost reached parity versus the euro last summer, at 1.20 francs per euro to prevent the economy from tipping into recession.
Danthine expressed his regret at Hildebrand's resignation but said the SNB's institutional strength was the result of teamwork. "The SNB's culture is one of excellence and of service. It is the product of a long history and many generations of leaders. It remains as strong as ever," he said.
Thomas Jordan took over as chairman ad interim pending the appointment of a permanent successor. He stressed the SNB's determination to defend the cap in a newspaper interview last week and said the SNB would take further steps should the economic outlook and deflationary risks make them necessary.
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