SNB interim director defends bank

Thomas Jordan, the Swiss National Bank interim director, says that although the SNB has been shaken by the resignation of his predecessor, it will maintain its course.

He told the Saturday edition of the Neue Zürcher Zeitung newspaper that the central bank would keep to its SFr1.20 ($1.28) floor against the euro for as long as is necessary.

Jordan was nominated to his interim appointment on January 9 after Hildebrand stepped down over controversial currency deals.

He said that the former director’s departure would not affect the bank’s policy, including franc-euro decision. “There is absolutely no alternative at the moment,” he said in the interview.

The export sector would have suffered more had the cap not been introduced, Jordan said. The franc was still highly valued, he added. But he admitted that the situation was still challenging for the export sector.

Asked about the calls for the cap to be set around SFr1.30 or SFr1.40 against the euro, Jordan replied that the bank was monitoring the situation.

“If the economic development and deflationary risks require it, we will take measures to ensure price stability and protect the economy,” Jordan said.

Swiss Economics Minister Johann Schneider-Ammann said in a SonntagsZeitung newspaper interview on Sunday that he expected the Swiss franc to weaken to about SFr1.40 per euro in the medium term with the return of “purchasing parity”. His said his minimum expectation was that the SNB would keep to the lower boundary of SFr1.20 per euro.