Swiss National Bank interim President Thomas Jordan said in a press briefing on Tuesday that the central bank will continue to enforce the minimum exchange rate at CHF 1.20 per euro, without any restrictions.
Jordon's comments came in response to the franc's rise to 1.20 per euro euro last Thursday.
"The fact that a few individual transactions at less than CHF 1.20 per euro were observed last Thursday has led to some isolated doubts being raised about the SNB's resolve to enforce its minimum exchange rate," Jordon said.
"The Swiss National Bank is enforcing the minimum exchange rate with all the means at its disposal and we are prepared to buy foreign currency in unlimited quantities for this purpose. In this respect, our policies are totally unchanged," he added.
"Within a few seconds the euro/franc fell from 1.2020 to 1.2000, and despite SNB offers placed in the trading systems, a few isolated transactions occurred below CHF1.20 per euro," Jordan said.
However "at no time did the best available euro exchange rate in the market fall below CHF1.20," he said.
Jordan also reiterated that the franc is still overvalued and poses a substantial risk to the Swiss economy, though he expects it to weaken further. "Should the economic outlook and the risk of deflation so require, the SNB stands ready to take further measures at any time," he added.
The SNB introduced its limit on September 6 to fight deflation threats and help Swiss exporters. Since then, the central bank's governing board members have repeatedly stressed their resolve to defend the ceiling, saying that the franc is overvalued.
The euro-franc pair that slipped to a 7-month low of 1.2002 last Thursday has been trading around 1.202 level this week.
by RTT Staff Writer
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