Arab Today, arab today swiss central bank chief defends franc move
Last Updated : GMT 15:32:42
Arab Today, arab today
Arab Today, arab today

Swiss central bank chief defends franc move

Arab Today, arab today

Arab Today, arab today Swiss central bank chief defends franc move

Chairman Thomas Jordan
Geneva - AFP

Switzerland's central bank chief on Friday defended the institution's shock decision to scrap efforts to stop the overheated franc rising, insisting the turbulence rocking markets and the Swiss economy should settle.
"You must remember that the currency cap from the beginning was supposed to be an exceptional and temporary measure," Thomas Jordan said in an interview to be published in the Saturday editions of Swiss dailies Le Temps and NZZ.
"It was always meant to be abandoned," he said, stressing that the bank's massive efforts to hold down the currency were no longer warranted.
"If the (economic) objective is no longer justified or sustainable, we should stop the exercise. We reached that point," he said.
The bank, he said, had determined that if it had continued its policy "it risked losing control of its monetary policy in the long term."
Jordan's comments came a day after the Swiss National Bank (SNB) stunned markets with its decision to abandon the minimum rate of 1.20 francs against the euro that it had been defending for more than three years.
The Swiss currency immediately gained nearly 30 percent against the euro, before stabilising at around parity -- which is still 15 percent higher than Wednesday's rate.
The soaring franc caused panic on global markets, bankrupted foreign exchange traders as far away as New Zealand and was seen as a significant threat to Switzerland's export-dependant economy.
The Swiss stock exchange's main SMI index has plunged more than 14 percent since Thursday morning.
- 'Markets should gradually stabilise' -
"We were aware that this decision could have a major impact on markets," Jordan said.
"The markets should gradually stabilise," he said, admitting though that "it could take time."
When asked if SNB might reintroduce a cap on the franc if the markets did not settle, Jordan said that if there was a clear need, the bank "would be active on the exchange markets."
The SNB had been defending the exchange rate floor since September 2011 in an effort to protect the country's vital export and tourism industries, even buying massive quantities of foreign currencies to do so.
The rate was introduced as the eurozone crisis sent investors scurrying to the safe haven currency. More recently, the Russian ruble crisis put renewed pressure on the franc.
As late as Monday, SNB vice chairman Jean-Pierre Danthine insisted in a media interview the bank would continue defending the policy.
Jordan said it had been important to not give away the planned shift in policy before the announcement to avoid speculation.
He said the bank directors had unanimously agreed to scrap the cap, insisting the Swiss economy was in a much better place than it had been when the cap was introduced in 2011.
- Not all powerful -
"We gave the Swiss economy time to adapt to the new situation. A period of three years is not negligible," he said.
Now that the cap was gone, Jordan acknowledged that "following this decision, the economic situation in Switzerland is more difficult" and that many Swiss companies would now face "challenges".
But, he pointed out, "SNB cannot fulfil all wishes with its monetary policy. It is not all-powerful."
Jordan said he understood the barrage of criticism facing the bank after Thursday's move, but that he was sure the bank had made the right decision.
He also brushed aside a comment from International Monetary Fund chief Christine Lagarde questioning why she had not been warned before the bombshell announcement fell.
"SNB is an independent central bank. It is our prerogative to prepare our decisions on our own," Jordan said.

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today swiss central bank chief defends franc move Arab Today, arab today swiss central bank chief defends franc move

 



Arab Today, arab today
Arab Today, arab today Mohamed Bahari prepares new collection for spring 2017

GMT 06:15 2017 Monday ,27 February

Mohamed Bahari prepares new collection for spring 2017
Arab Today, arab today As Olympics loom,China plunges into biz

GMT 10:08 2017 Tuesday ,28 February

As Olympics loom,China plunges into biz
Arab Today, arab today Sheds light on major steps in 12-year career

GMT 06:07 2017 Monday ,27 February

Sheds light on major steps in 12-year career
Arab Today, arab today UN envoy sets out framework

GMT 07:25 2017 Monday ,27 February

UN envoy sets out framework
Arab Today, arab today Kalam Nawaem made a difference in social issues

GMT 06:43 2017 Tuesday ,28 February

Kalam Nawaem made a difference in social issues
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Parliament considers solutions to overpopulation

GMT 20:27 2017 Monday ,27 February

Parliament considers solutions to overpopulation
Arab Today, arab today Humans spark most US wildfires

GMT 14:58 2017 Tuesday ,28 February

Humans spark most US wildfires
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Final Phantom VII signals end of an era

GMT 14:31 2017 Tuesday ,28 February

Final Phantom VII signals end of an era
Arab Today, arab today 'Constructive' Vauxhall talk with union

GMT 08:54 2017 Saturday ,25 February

'Constructive' Vauxhall talk with union
Arab Today, arab today Aspires present the story of Egypt’s first president

GMT 06:18 2017 Sunday ,26 February

Aspires present the story of Egypt’s first president
Arab Today, arab today Penguins in the age of dinos

GMT 11:44 2017 Saturday ,25 February

Penguins in the age of dinos

GMT 06:42 2017 Saturday ,25 February

Reasons for the delay 'On the Stairs of Servants'

GMT 05:14 2017 Thursday ,23 February

UK appoints 1st Scotland Yard chief in 188 years

GMT 18:23 2017 Friday ,24 February

Fadi explains secrets of  Nancy Ajram's newlook

GMT 12:16 2017 Thursday ,23 February

Ex-yoga missionary unleashes rage

GMT 19:45 2017 Monday ,20 February

Sarah Belamesh designs antiques of "ceramic"

GMT 10:51 2017 Saturday ,25 February

Pigs with edited genes show resistance

GMT 18:28 2017 Saturday ,25 February

Tourist guide explains types of tourism

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 06:28 2017 Tuesday ,28 February

Dumbphones survive rise of the smartphone

GMT 22:42 2017 Thursday ,23 February

Nasima Gamei revives heritage in jewelries
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday