GENEVA Jan 24 Switzerland's central bank cannot
easily adjust its cap on the Swiss franc's value, its
vice-chairman said, challenging speculation that it could move
the cap to a weaker level.
Switzerland imposed the limit of 1.20 francs per euro in
September 2011 and has poured francs into the market, fending
off investors whose search for an alternative to euros could
drive up the franc and damage Swiss exports and tourism.
Until this month the franc had stuck tight to the
1.20 limit but greater confidence that the euro zone can ride
out its sovereign debt crisis has left it floating freely in the
past week at about 1.24.
"We welcome this development but, even if we consider the
franc continues to be too strong, the currency cap policy is not
designed to allow fine tuning of the level of the cap," SNB
vice-chairman Jean-Pierre Danthine told the Tribune de Geneve in
an interview published on Thursday.
Danthine said that the SNB's foreign exchange reserves were
worth 427 billion francs at the end of December. He declined to
comment on intervention, when asked if the bank was selling
The strong franc has helped push Swiss prices down for the
past few months and Danthine said this was expected to continue
for several months more.
However, real estate prices were not falling.
"The property market dynamic remains too strong. It is not
sustainable," he said, adding that the SNB was studying the
impact of steps already taken to cool prices, such as a
restriction on using mandatory private pension savings known as
the "second pillar".
Asked if buyers might be forced to put down bigger deposits
or if the SNB had some other ruse to calm the property market,
he said: "Either there is a soft landing or other measures such
as those that you mention will be necessary."