"The SNB's consistent and successful defense of the exchange floor has boosted CFOs' confidence that the Swiss franc will not return to its previous strength in the near future,"
- Deloitte LLP
During July's policy meeting the Swiss National Bank's President Thomas Jordan said the bank has no intention to introduce any changes or even scrap a Franc ceiling of 1.20 versus the single currency. The SNB imposed the cap on the nation's currency almost two years ago, in September 2011, amassing foreign-currency reserves equal to almost 75% of Swiss annual gross domestic products, as a result of its market interventions to defend the limit. The abolishment of the ceiling is not an option at the moment, as risks of deflation and recession are still high, mostly due to a longest-ever economic slump in the Eurozone. The SNB now expected consumer prices to drop 0.3% this year.
Last month the SNB said they do not exclude any other instruments to support the economy. Hence, the International Monetary Fund earlier this year gave the SNB the permission to charge domestic banks on their excess deposits. Even though the Franc depreciated 2.3% against the Euro this year, the majority of Swiss analysts see the EUR/CHF pair reaching 1.25 within the next 12 months. In June the SNB's holdings dropped to 434.9 billion francs, down from a revised 444.1 billion francs recorded in May.
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