Central bank confirms exchange rate floor
The Swiss National bank says it will continue to enforce the minimum exchange rate of SFr1.20 per euro despite temporary breaches over the past few days.
Central bank interim chief Thomas Jordan told reporters at a press briefing on Tuesday that the bank is enforcing the minimum exchange rate with all the means at its disposal.
“We are prepared to buy foreign currency in unlimited quantities for this purpose. In this respect, our policies are totally unchanged.”
On April 5 the euro cost just under SFr1.20 for the first time since the floor was introduced seven months ago to fight deflation and help the Swiss export industry.
However, Jordan warned that such breaches of the minimum exchange rate could reoccur.
He said last week’s incident took place in a segmented market and that the situation was remedied within very few seconds by means of arbitrage.
Jordan stressed that the overvalued franc was putting a strain on the Swiss economy.
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