February 28, 2020 / 3:39 PM / a month ago

UPDATE 1-Swiss National Bank says coronavirus has increased economic risks

(Adds details of market movements)

ZURICH, Feb 28 (Reuters) - The widening coronavirus outbreak has increased economic risks which would have negative consequences for Switzerland and increase the attraction of the safe-haven franc, the Swiss National Bank said on Friday.

“The coronavirus has increased the economic risks. If the international environment were to deteriorate, this would have consequences for Switzerland as a small, open economy,” the central bank said in a statement.

The impact on trading partners like China could also affect the Swiss economy, the SNB said, adding increased uncertainty could increase upward pressure on the Swiss franc.

“Moreover, in times of uncertainty, investors are increasingly looking for safe havens such as the Swiss franc, which can help the franc appreciate,” the SNB said.

The currency reached its highest level against the euro in nearly four and half years this week as investors sought less risky assets.

Switzerland has joined countries banning big events to try to curb the epidemic, forcing cancellation of next week’s Geneva international car show, one of the industry’s most important gatherings.

The number of confirmed coronavirus cases in Switzerland has risen to 15, and more than 100 people are in quarantine, government minister Alain Berset said.

“We have the situation under control, but this can change very quickly,” he told a news conference in Bern, adding the ban would certainly hit the Swiss economy.

The blue-chip Swiss Market Index .SSMI was 4.5% lower at 15.34 GMT amid a rout in financial markets over fears the virus’s spread could trigger a global recession.

Reporting by John Revill; Editing by Jon Boyle

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