Switzerland’s exchange rate peg against the euro remains “absolutely necessary”, despite waning deflation risks and the upturn in the single currency, the head of the Swiss National Bank (SNB) told CNBC.
On Thursday, the SNB opted to continue its foreign currency purchases aimed at maintaining a minimum exchange rate of 1.20 Swiss francs to the euro. The SNB also held its three-month Libor target range at 0.00-0.25 percent.
“The minimum exchange rate remains absolutely necessary in order to ensure adequate monetary conditions in Switzerland. It is insurance against sudden shocks in the exchange rate so that we can work against deflation in Switzerland,” said SNB Chairman Thomas Jordan.
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