SNB vice chairman says it premature to speak of long-term change in interest rate

Reuters reported that the Swiss National Bank welcomes the recent weakening of the Swiss franc, SNB Vice Chairman Fritz Zurbruegg told Swiss newspaper Blick, although it remains premature to shift away from its current ultra-expansive monetary policy.

“The development in recent weeks, the weakening of the franc, is welcome and pleasing,” Zurbruegg told the newspaper in an interview to be published on Wednesday.

Key comments

Swiss national bank vice-chairman says welcomes recent weakening of swiss franc – blick newspaper.

 SNB vice chairman says it premature to speak of long-term change in interest rates.

SNB vice chairman says negative interest rates, currency market interventions remain necessary.

SNB vice chairman says the central bank has spent 100 bln SFR  in the past year on foreign currency interventions.

Market implications

Zurbruegg hinted the SNB would stick to its policy interest rate of minus 0.75% – the lowest in the world – when the central bank gives its next monetary policy update on March 25.

“We can go further if the situation requires it,” he said, adding the SNB had spent 100 billion Swiss francs  ($107.64 billion) on currency interventions in the past year.

This is bearish for the currency that has already  depreciated roughly 3% against the euro so far this year.