Swiss National Bank (SNBN) President Thomas Jordan said he has no intention to change or scrap a franc ceiling of 1.20 versus the euro.
“We will maintain our current policy for as long as necessary,” Jordan said on July 20 in Moscow, where he attended a meeting of Group of 20 finance chiefs. “This monetary policy stance is needed to act within our mandate.”
The SNB imposed the cap on the franc in September 2011, amassing foreign-currency reserves equal to about three-quarters of Switzerland’s annual economic output as a result of its efforts to defend the limit. Abolishing the ceiling is still a ways off, Jordan said in the central bank’s most recent policy review on June 20. The SNB cited the risk of deflation as its justification for the cap. It expects consumer prices to fall 0.3 percent this year.
At the SNB’s June press conference, Jordan also reiterated that the regulator wouldn’t exclude any instrument to help maintain adequate monetary conditions. The International Monetary Fund earlier this year gave the SNB the green light to charge banks on their excess deposits, should the franc be subject to another round of appreciation pressure.
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