The President of the Swiss National bank declared the intention of conducting forex markets intervention in order to weaken the franc in case of necessity.
The regulator declined to support the national currency minimum rate at 1.2 against the euro due to contradictory economic conditions and rising risk of euro-buying operations.
«The bank continues following the situation and is ready to act out of necessity,” President of Swiss National Bank Thomas Jordan noted.
“We have said goodbye to the minimum exchange rate,” he said. “But we will continue to consider the exchange-rate situation in our decisions and intervene in the foreign-exchange market if necessary.”
The Swiss National bank abandoned the ceiling on the national currency against the euro set in September 2011. The bank also lowered demand deposits interest rate to -0.75 percent from 0.25 percent. Besides, the three-month LIBOR target range was adjusted to the value of between -1.25 percent and -0,25 percent from the value of between -0.75 percent and +0.25 percent previously.
The President of SNB considers the franc to remain “greatly overvalued”. “Market will understand that its value is unjustified," he added.
The franc becomes less attractive currency due to the negative interest rate. The head of the SNB also eliminated a possibility of capital movements control.
Due to a great value of the national currency, Switzerland’s export sales in the eurozone are to conract.
