The Swiss franc’s depreciation is a “welcome relief” for the economy, but it’s still too soon to adjust policy, Swiss National Bank PresidentThomas Jordan said.
After years of dogged strength, which the SNB countered with currency market interventions, the franc has dropped almost 10 percent against the euro over the past 12 months and last week breached the 1.20-per-euro mark, which once was the central bank’s minimum exchange rate.
“There has thus been a reduction in the significant overvaluation, but our currency nevertheless remains highly valued,” Jordan said at the institution’s annual shareholder meeting in Bern on Friday.
The SNB will continue with its policy of a deposit rate of minus 0.75 percent and a pledge to intervene in markets if needed, he said, explaining they are “essential” and the situation still “fragile.”
“Tightening monetary conditions would be premature at this juncture, and would risk unnecessarily jeopardizing the positive economic momentum that has been established,” he said.
Source : Bloomberg