MUMBAI Nov 19 The Swiss franc is still
overvalued at 1.20 per euro, Swiss National Bank Alternate
Governing Board member Thomas Moser said on Monday, reiterating
the central bank's stance in continuing to defend the currency.
The SNB set a cap of 1.20 per euro on the franc a year ago
to ward off deflation and a recession when investors rushed to
buy the Swiss currency as a safe haven from the euro crisis.
Swiss policymakers have been engaged in a campaign of
ultra-low interest rates, currency intervention and money market
measures to prop up an economy hurt by record-breaking gains for
the franc and the euro zone's downturn.
"As we have said in several statements, at 1.20, the Swiss
franc is still overvalued, and it is still the case," Moser said
in the sidelines of a conference in Mumbai.
"The economy is still suffering, but it does not get the
damage of a much higher exchange rate," he added.
Moser also said he did not expect Switzerland to enter a
recession, although he expected a slow recovery for the economy.
"In our baseline scenario, we do not see a recession even
though the global economic outlook has worsened again and it
affects Switzerland," Moser said, adding he expected to see
"slow growth" and a "slow recovery."
Switzerland's economy shrank unexpectedly in the second
quarter as the crisis in the euro zone dampened demand for Swiss
goods and services.
At its September policy meeting the SNB cut its 2012 growth
forecast to 1 pct from 1.5 pct and kept its target range for the
three-month Libor at 0.00-0.25 percent.
(Reporting by Shami Paul; Editing by Kim Coghill)