The franc appreciation causes major concern of the Swiss National Bank. The bank’s council adopted a resolution to maintain its cap on the franc for at least another two years. Such an effort was made as the economic revival in the neighboring euro area struggles to gain tractions. Most analysts expected the franc dynamic to unfold this way with the central bank keeping its ceiling of 1.20 per euro at least until 2016. So, the Swiss National Bank has approved this policy until 2016. In the context of the debt crisis Europe is currently facing as well as deflationary and even recession risks, the Zurich-based Swiss Finance Institute set the minimum franc exchange rate three years ago. The recent euro zone’s surveys show the economic recovery stalled in Q2. Assessing the euro zone’s economic performance, ECB President Mario Draghi announced that interest rates would remain at the present record low for a protracted period. “So long as the ECB does not raise rates, the SNB cannot do anything either,” said David Marmet, an economist at Zuercher Kantonalbank. “The ECB is very hesitant to do anything, and that indicates that the point in time for the Swiss doing anything gets pushed back.” According to the poll, 39% of the respondents are certain the SNB will keep the current cap valid until 2016 at the earliest whereas 44% of the pollees do not expect the move before 2017. They believe the extended period of weak economic growth in the euro zone made analysts shift the term when the Swiss National Bank might change the franc exchange cap.
