Thursday, June 1, 2023
HomeEconomyCHF not highly valued - SNB's Jordan

CHF not highly valued – SNB's Jordan

ZURICH (Reuters) – Although the Swiss franc has risen nominally, it is not worth much, Swiss National Bank Chairman Thomas Jordan told a Swiss newspaper, adding that the central bank was interested in taking a risk on the safe-haven Currency views are vague.

“In the past, we have called the CHF overvalued or even grossly overvalued to signal the need for intervention. Currently, the CHF is valued as no longer Obviously high, we don’t want to comment on every move,” he told the Neue Zuercher Zeitung newspaper in an interview published on Saturday.

His comments come as the SNB focuses on using the franc to cap the franc after years of currency intervention and negative interest rates, out of fears that it will weaken the export-reliant economy and thus have the ability to fight inflation.

Jordan said he did not see a competitive period of currency appreciation and other central banks followed the same strategy.

“Th the yen is at historically low levels, the pound has depreciated significantly, and the euro is relatively weak. I don’t see any signs of competition appreciating. The two strong currencies, the dollar and the Swiss franc, are seen as safe havens,” he said. Say. intervention, he said. “But we also don’t want to exacerbate the inflation problem because the franc is too weak. We deliberately don’t want to be more specific.”

Jordan said the SNB’s balance sheet is a policy tool that can be linked with policy Interest rates are used together to ensure price stability.

“We’re not going to shrink our balance sheet just because of the sheer size, but if that helps us ensure price stability, we certainly will,” he said.

Closing the SNB’s balance sheet “could take quite some time”, he said.

“If we sold large foreign currency holdings immediately, this would create excessive appreciation pressure. The most favorable time to sell is when we have inflationary pressures, interest rates are clearly positive and the Swiss franc is When the trend is weakening.”

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