June 29, 2015 / 9:00 AM / 3 years ago

UPDATE 1-SNB head confirms weekend intervention to weaken franc

(Adds quote from Jordan on intervention, detail)

BERN, June 29 (Reuters) - The Swiss National Bank intervened in foreign exchange markets over the weekend in an effort to hold down the franc’s rise amid uncertainty over Greece’s financial future, the central bank’s chairman said on Monday.

“We have always said that we are active in the foreign exchange market if necessary,” SNB Chairman Thomas Jordan said at a finance event in Bern, Switzerland. “A situation like we experienced over the weekend is a situation which warranted this need and we went in to stabilize the market.”

Jordan would not comment on the details of the intervention.

A Greek default would be likely to set off safe-haven flows into the Swiss currency and spur the SNB into action.

Jordan said a Greek default was not part of the SNB’s base scenario but the central bank was prepared for such an event.

Over the weekend, Greece closed its banks and imposed capital controls to check the growing strains on its crippled financial system, bringing the prospect of being forced out of the euro into plain sight.

Greece’s failure to reach a deal with creditors leaves the country on the brink of defaulting on 1.6 billion euros of loans from the International Monetary Fund that fall due on Tuesday.

The impending default on the IMF loans also leaves Greece sliding towards an exit from the euro, with unforeseeable consequences for Europe’s common currency project.

Jordan said the euro zone is in a better position than a few years ago and that turmoil in Greece is unlikely to destabilise other euro zone countries such as Spain and Portugal.

Reporting by Joshua Franklin and Paul Arnold; Editing by Michael Shields, Larry King

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