SNB’s Maechler Says Franc Level Means Expansionary Policy Needed
SNB’s Maechler Says Franc Level Means Expansionary Policy Needed
(Bloomberg) --
Swiss National Bank Governing Board Member Andrea Maechler said the franc’s value means the central bank’s ultra-loose monetary policy is vital.
Recent data from the central bank suggest it’s been back in the market, making good on its pledge to sell the franc if it gets too strong. Asked about intervention limits, Maechler said it’s “very much a question of context,” and action always requires a cost-benefit analysis.
She also said the “expansive monetary policy of the SNB remains necessary.” Inflationary pressures are very weak, and it wouldn’t take much to make consumer prices fall, she said in Lausanne on Wednesday.
Switzerland has the world’s lowest benchmark policy rate at -0.75%. It’s recent interventions may be just the start. If the European Central Bank cuts interest rates next month, the SNB is expected to follow with its own reduction.
--With assistance from Vince Golle.
To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net
To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Zoe Schneeweiss
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