The SNB closely follows the development of the franc and stands ready to intervene – Maechler


ZURICH, Nov. 27 (Reuters) – The Swiss National Bank (SNB) is monitoring the exchange rate of the Swiss franc “very closely” to monitor its impact on the economy and stands ready to intervene if necessary, said Andrea Maechler, member from the board of directors, to the RTS television channel.

“At the SNB, we are always ready to intervene in the foreign exchange markets if necessary,” Maechler said during the interview with the RTS TV show Forum. “We are not aiming for a specific exchange rate, nor a specific level or a specific rate against the euro or the dollar, but we are monitoring it very closely to see the impact on the economy.”

The Swiss franc hit its highest level against the euro in six years on Friday, with no sign of the currency interventions the SNB has often undertaken at such times in the past.

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Maechler said it was difficult for the economy to cope with sudden changes in the exchange rate, while incremental adjustments were more manageable.

“An exchange rate is a value against a foreign currency, so it also depends on the inflation we have here in Switzerland compared to the inflation abroad,” she said.

The SNB has seen inflationary pressures in the current environment, she said, but it remains to be seen if this is only temporary.

“Inflation signals that the economy is on the road to recovery. From that point of view, we see it with great optimism,” she said. “The question is how fast is this going up and right now we are seeing some inflationary pressure. The question is whether this is temporary or the start of a big bullish move.”

It is not for the central bank to react to “every shock,” she said, but rather to keep inflation within the SNB’s 0-2% target range over a medium-term horizon of two. at three years.

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Reporting by Silke Koltrowitz; written by Brenna Hughes Neghaiwi; edited by Nick Macfie

Our standards: Thomson Reuters Trust Principles.


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