U.S. Censure Won’t Stop SNB FX Interventions, Central Bank Chief Says

Swiss National Bank President Thomas Jordan said U.S. censure won’t stop his institution’s purchases of foreign exchange to fend off deflation, according to an interview with broadcaster SRF.

The central bank governor said he hasn’t yet spoken to Treasury Secretary Janet Yellen about getting Switzerland taken off the U.S. list of currency manipulators. But talks with officials in Washington both at a technical and a political level are planned after the U.S. added the country to the list last year.

U.S. Censure Won’t Stop SNB FX Interventions, Central Bank Chief Says

“Switzerland really isn’t a manipulator,” Jordan told SRF’s ECO program. “We have to find a way to create favorable monetary conditions so that the Swiss economy can develop and doesn’t sink into deflation. At the moment these foreign exchange interventions are very important.”

Like its European neighbors, the Swiss economy as been battered by the global pandemic. Business shutdowns to control the virus mean economic growth in the final quarter of 2020 and the first quarter of this year will be weak, and output may contract, Jordan said.

While a bleak inflation outlook necessitates the SNB’s negative rates at the moment, Jordan told the broadcaster he and his colleagues look forward to scrapping them when the economic situation improves.

“We’re not big fans of these negative interest rates,” he said. “We’ll raise rates as soon as possible.

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