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SNB Chief: Overvalued Swiss Franc Still Weigh On Economy

11/16/2012 4:58 AM ET

At its current rate, the Swiss franc remains high and is weighing on the Swiss economy, Swiss National Bank Chairman Thomas Jordan said Friday.

He reaffirmed that the central bank would leave the minimum exchange rate unchanged and continue to enforce it with utmost determination.

The country retains its safe-haven status. "The reasons behind the setting of the minimum exchange rate in September 2011 retain their validity," he said in a speech in Zurich.

The minimum exchange rate has made a decisive contribution to stabilizing the Swiss economy, Jordan said. "The export industry is gaining ground again, and the deflationary expectations that were threatening to take hold were checked."

Further, he said the bank tried to reduce the risks from exchange rate through suitable diversification of foreign currency investment. Nonetheless, "the primacy of monetary policy means that our scope for diversification is limited," Jordan said.

by RTT Staff Writer

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