"The adjustment of the minimum exchange rate is something that principally belongs to the options if needed"
-SNB President Thomas Jordan
The Swiss National Bank is expected to introduce a shift of the cap on the Franc and even plan to implement negative interest rate, as the Swiss Franc is heading to break through 1.26 per euro for the first time in more than two years, President Thomas Jordan said Wednesday. Almost two years ago the SNB has imposed 1.20 per euro cap in order to limit Franc's appreciation, to ward off deflation and a recession. During its next monthly meeting, the SNB could take further measures and even raise the cap, as consumer prices have fallen for 19 consecutive months. In the meantime, the nation's central bank sees the Swiss economy growing as much as 1.5% this year.
"The adjustment of the minimum exchange rate is something that principally belongs to the options if needed," Jordan told reporters in Frankfurt yesterday. "We will maintain the minimum exchange rate for as long as necessary."
"The next move by the SNB has become unpredictable," Peter Rosenstreich, chief foreign exchange analyst at Swissquote in Geneva, said in an e-mailed note. "As always traders are getting way ahead of themselves by speculating that the SNB will act with some new measure."
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