Financial woes in individual European countries also pose significant risks for Switzerland, the head of the Swiss National Bank (SNB) warned on Friday.
This content was published on
1 minute
But Philipp Hildebrand, chairman of the central bank, said Switzerland maintains enough flexibility in its monetary policy to help counteract the damage a deflating euro could have on an economic rebound.
If the euro loses stability in the wake of Greece’s financial troubles and the downgrading of Portuguese and Spanish debt, investors could flock to the Swiss franc as a “safe haven” currency. That would drive up the franc’s value and make Swiss exports more expensive.
“The SNB will not …allow such a development to turn into a new deflation hazard for Switzerland,” Hildebrand said. “For this reason, it is acting decisively to prevent an excessive appreciation of the franc.”
Markets have assumed the Swiss central bank has been intervening in recent days to keep the franc stable. The SNB has been buying euros in the year’s first quarter and up until December had managed to keep the franc’s value above SFr1.50 ($1.38) per euro.
At the close of trading on Thursday, a euro cost SFr1.43.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Franc’s rise against the euro causes concern
This content was published on
Leuthard, who holds Switzerland’s rotating presidency this year, says the franc is “at a quite crucial level”. The euro was trading at a record low of SFr1.4274 ($1.33) on Thursday. Leuthard told reporters in Bern that it was up to the Swiss National Bank to decide whether to intervene to soften the franc. The eurozone…
This content was published on
Many economists believe low interest rates combined with a flood of financial stimulation is the perfect recipe to combat rampant price hikes. But others believe sensible monetary policy would nip the problem in the bud. Speaking at the Hedge Funds Zurich conference on Thursday, trader and author Nassim Taleb warned the world to brace for…
This content was published on
It added however that the outlook for the Swiss economy had worsened as the global credit crisis dragged on. “Given the deterioration in the international environment, this slowdown will be somewhat more pronounced than anticipated previously,” the SNB said in a statement after Thursday’s decision. It followed similar announcements last week by the European Central…
This content was published on
Traditionally, a white elephant is an object, building or project whose usefulness is doubtful and whose cost was often exorbitant. Swiss photographer Christian Helmle spent seven years tracking the most impressive of these beasts in the wilds of Europe, publishing the results in his book, “White Elephants” (Jovis Verlag Berlin).
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.