January 16, 2014 / 5:01 PM / 4 years ago

SNB's franc cap remains focus of monetary policy - Jordan

ZURICH, Jan 16 (Reuters) - The Swiss National Bank’s lid on the Swiss franc will remain at the centre of monetary policy for the foreseeable future, and the value of the safe-haven currency is still high, the central bank’s chairman said on Thursday.

The SNB capped the Swiss franc at 1.20 per euro in September 2011 to protect the economy from deflation and recession after the safe-haven unit made large gains during the euro zone crisis.

“We are currently emphasising the fact that, as a result of the low rate of inflation and the risk of appreciation, the minimum exchange rate will be the focus of monetary policy implementation for the foreseeable future,” SNB Chairman Thomas Jordan said, according to remarks prepared for a speech in Zurich.

Swiss annual inflation hovered in positive territory for the second month running in December, underscoring the success of the SNB’s policy of capping the franc to ward off deflation.

Any changes a central bank makes to monetary policy must be taken with great caution and care, Jordan said.

“Our monetary policy strategy worked well during the crisis, so there is no reason for us to abandon it,” Jordan said.

“Meanwhile, the value of the franc is still high,” he said. (Reporting by Alice Baghdjian; Editing by Toby Chopra)

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