(Bloomberg) -- The Swiss National Bank is intervening more heavily in the foreign exchange market to weaken the franc and can further cut interest rates, if a cost-benefit analysis warrants such a step, President Thomas Jordan said.
“We have room to maneuver for both instruments,” Jordan said at a panel discussion hosted by UBS Group AG. “It’s clear that we have the possibility to cut rates if necessary.”
The SNB has long used a deposit rate of -0.75% plus a pledge to wage foreign exchange market interventions to keep the franc in check. With pressure on the haven currency rising as a result of the coronavirus pandemic, bank officials said they’d picked up the pace of activity and reserve data back up that claim.
Jordan said any policy step required a cost-benefit assessment and that the SNB would enlarge its balance sheet via interventions if the pros outweighed the cons.
It wasn’t possible to say how long pressure on the highly d franc would endure, he also said.
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