January 25, 2019 / 11:19 AM / 22 days ago

SNB's Jordan warns of no-deal Brexit impact on Switzerland

ZURICH (Reuters) - A disorderly British exit from the European Union could hurt Switzerland, Swiss National Bank Chairman Thomas Jordan said, underscoring the central bank’s need to keep its ultra-loose monetary policy.

FILE PHOTO: Swiss National Bank (SNB) Chairman Thomas Jordan delivers a lecture during the Wirtschafts Symposium Aarau symposium in Aarau, Switzerland January 16, 2019. REUTERS/Arnd Wiegmann

Britain’s leaving the trading bloc without a deal could have a negative impact on the European economy and also rile financial markets, both of which could hurt Switzerland, Jordan said.

Raised global uncertainty made the SNB’s expansive monetary policy “appropriate,” Jordan told CNN Money Switzerland in an interview to be released on Friday, adding he saw “really no need” to change course.

“It is most likely a no deal will have rather a negative impact on the business cycle in Europe,” Jordan said in the interview at the World Economic Forum annual meeting in Davos. “It will change sentiment and change decisions.

“At least in the short run it will have a negative impact and probably also in the long run depending on what happens after that.”

Jordan said Brexit could disturb financial markets, particularly the exchange rate for the pound and the euro which could have spill-over effects for Switzerland, whose exporters has been battling against a highly valued franc.

“These are all questions which have a very big impact on conditions for Switzerland because we export to those countries, because the exchange rate is important,” Jordan said.

The eurozone is critical to Switzerland’s economy, buying nearly half its exports. Britain meanwhile was the seventh-biggest export market for Switzerland, according to Swiss customs office statistics.

Jordan said the SNB’s strategy of negative interest rates and a willingness to intervene in the currency market remained the right stance to curb the rise in the safe-haven Swiss franc, sought by investors at times of upheaval.

Swiss inflation remained very low, while the country’s economy showed no signs of overheating, the central banker said.

“At the same time we still have a fragile situation on the foreign exchange markets and an increased uncertainty in the global economy,” Jordan said.

“As long as these circumstances [are present], there is really no need to change our monetary policy,” he added.

Reporting by John Revill; Editing by Michael Shields

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below