SNB President Stresses Readiness to Intervene and Cut Rates

(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 valued franc would endure, he also said.

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