According to the Swiss National Bank’s (SNB) Governing Board member Andrea Maechler, the SNB’s current monetary policy stance with negative rates and the freedom to intervene in currency markets at will is appropriate to actively manage given risks including Brexit.
With broader markets on the fragile side thanks to Brexit, Italian budget concerns, and the ever-present US-China trade spat, Maechler stated in a newspaper interview that the CHF’s level remains high: “In the current context, the negative interest rate remains indispensable for Switzerland. It enables us to restore, at least partially, a difference between Swiss interest rates and those abroad, thus reducing the franc’s attractiveness.”
The traditional safe-haven status of the Swiss Franc poses problems for Switzerland’s various exporters, with a steadily-worsening global economic outlook increasing risk tensions across the board. According to the SNB’s Maechler, “in the current context we are persuaded that our monetary policy based on the negative interest rate and our capacity to intervene on the currency market if needed is appropriate.”
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