The Governor of the Swiss National Bank (SNB) Thomas Jordan stated that the bank does not intend to change or abolish the minimum exchange rate of 1.2 francs per euro, according to media reports.
– We will maintain the existing policy for as long as necessary – said Jordan last weekend in Moscow at the G20 finance ministers’ meeting. The SNB fixed the franc’s exchange rate against the euro in September 2011. At the monthly meeting of SNB leaders a month ago, Jordan emphasized that abandoning the established exchange rate level is not planned for the near future, citing the ongoing risk of deflation among the reasons. The bank expects a 0.3 percent decline in consumer prices this year.
At the regular SNB meeting, he also reiterated that the regulator does not rule out the use of all available instruments that could help maintain appropriate monetary conditions. The International Monetary Fund (IMF) had previously given the green light to the central bank’s decision to charge banks for their excessive deposits if pressures for the appreciation of the franc strengthen again.
Since the beginning of the year, the franc has weakened by 2.3 percent against the euro due to the easing of the fiscal crisis in the 17-member eurozone. This morning, it was traded at 1.2364 francs per euro in the Zurich market.
Swiss company CFOs expect it to weaken further to 1.25 francs per euro in the next 12 months, recent results from a Deloitte LLP survey conducted among 120 CFOs showed.
– The SNB’s consistent and successful defense of the minimum exchange rate has strengthened CFOs’ confidence that the franc exchange rate will not return to previous strong levels in the near future – they explain at Deloitte.
