"The franc currently is probably less of a problem for Swiss exporters than it was in the past. They are more hurt by weaker growth globally"
- Maxime Botteron, an economist at Credit Suisse Group AG
During its monthly policy meeting the Swiss National Bank decided to retain the currency ceiling at 1.2 per Euro, saying risks to the economy from external developments, especially neighbouring Eurozone, remains high. The SNB President Thomas Jordan pointed out that a highly valued Swiss Franc may compromise price stability and is posing serious consequences for the economy. Therefore, the minimum exchange rate remains a priority, in order to avoid an undesirable tightening of monetary conditions and implementations of strict austerity measures for Switzerland. According to the SNB, Switzerland would have suffered a severe recession in case they decided not to put a ceiling in place in September 2011.
The target range for the three-month Libor was also put on hold between 0.0% and 0.25%, as economic conditions are expected to gradually improve both in Switzerland and in the world economy over the next 12 months. The SNB also projected a weaker growth for the second quarter, however for the full 2013, SNB predicts an expansion between 1% and 1.5%, underlying the downward pressures from other economies. Such factors as weaker global growth, deepening sovereign debt and financial crisis in the Eurozone as well as tensions on the global markets will keep weighing on the performance of the Swiss economy.
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