BERN, Switzerland (Reuters) - The Swiss National Bank has further room to manoeuvre in its monetary policy and will not shy away from using unconventional measures if that is in the country’s interests, its chairman said on Friday.
Like other central banks, the SNB has had to take unconventional measures over the past years to react to powerful shocks in the global economy, Thomas Jordan told SNB shareholders at the bank’s annual general meeting, according to the text of his speech.
“We too have resorted to unconventional methods and, as in the past, we will not shy away from using these methods if it is in the interests of the country as a whole,” he said, adding the SNB always had to carefully consider costs and benefits of such actions.
The SNB lifted a cap on the Swiss franc versus the euro in January 2015 and is currently using a combination of negative interest rates and a willingness to intervene in the foreign exchange markets to keep the strong franc in check.
The SNB currently has a negative interest rate of -0.75 percent in place which it charges on sight deposits held at the SNB by banks and other financial market participants.
The franc is weaker than immediately after the cap was lifted but remains “significantly overvalued”, Jordan said.
It traded at around 1.0963 francs per euro early on Friday.
“Even though we have already gone a long way with negative interest and our willingness to intervene in the markets, there is still room for manoeuvre in our monetary policy,” Jordan said.
Reporting by Silke Koltrowitz and Brenna Hughes Neghaiwi Editing by Jeremy Gaunt
Our Standards: The Thomson Reuters Trust Principles.