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euro-franc parity not economically important -Breaking


© Reuters. FILE PHOTO – Chairman of the Swiss National Bank (SNB), Thomas Jordan, gestures during a press conference in Bern Switzerland on June 17, 2021. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters). Chairman Thomas Jordan of the Swiss National Bank stated that the rise in the Swiss franc to parity with the euro will not have a major economic impact.

The Swiss currency has seen a surge in value as investors seek safe-haven assets to protect themselves from the turmoil unfolding in Ukraine. The Swiss currency rose from 1 franc to one euro earlier in the month and then fell to about 1.02 euro. An year ago, one euro was equivalent to 1.10 francs.

Jordan said that it was not important from an economic standpoint when Jordan was asked whether the central bank could fight the Franc’s rise above parity.

We don’t forecast where the exchange rate might go. But what is important? It’s not just about the euro, we look at all currencies…and the inflation differentials, too.

He said that higher inflation in Switzerland has reduced the effect of the stronger Franc. Swiss companies generally cope well with its higher value.

Jordan stated that the Swiss inflation rose to 2.2% in 2008 and remains high compared with Europe and the United States.

In its most recent update, the SNB maintained its expansive monetary policies. It kept interest rates at minus 0.755%. However, it doubled its inflation projections for 2014.

Jordan stated that the central bank will continue to closely monitor inflation and keep an eye on changes in the exchange rate.

Jordan stated that the Franc is still highly valued and that he was ready to intervene in the currency markets if necessary to stop the Franc from becoming too strong.

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