SNB head watching fx movements closely
Published: Sunday, 4 Jul 2010 | 5:42 AM ET
ZURICH, July 4 (Reuters) - The Swiss National Bank is keeping a close eye on exchange rate movements, its chairman Philipp Hildebrand was quoted as saying in an interview published on Swiss website blick.ch on Sunday. "The currency fluctuations of the Swiss franc have indeed picked up in the last weeks. The SNB is following these developments on the foreign exchange market very closely," Hildebrand said when asked if the SNB would intervene again should the euro weaken too much. The Swiss franc has risen to record levels against the euro since the SNB backed off a pledge to fight an excessive appreciation of the franc at its last monetary policy assessment. The SNB sold francs for euros for more than a year as part of its fight against deflationary risks, and Switzerland's currency reserves posted their sharpest rise on record in May. The overall currency reserves rose to 232.4 billion Swiss francs ($219 billion) that month. Hildebrand said, however, that there was currently no threat of inflation, despite the amount of liquidity it had pumped into the market. "At the moment, I see extremely low inflation risks in Switzerland," Hildebrand said. "I have no doubt that we can absorb the high liquidity in time.
We will also be able to decide when to do this so that we don't have to worry about inflation in the medium or long term," he said. Hildebrand also said there had been progress on the "too-big-to-fail" banks issue. A Swiss government commission has called for the country's two big banks UBS and Credit Suisse to change their structure so that they could be broken up in the event of insolvency, and a report on this issue is due in August. Hildebrand also said in the interview the SNB was concerned about a possible real estate bubble. "There is no reason to panic, but also no reason for the all-clear," he said.
Published: Sunday, 4 Jul 2010 | 5:42 AM ET
ZURICH, July 4 (Reuters) - The Swiss National Bank is keeping a close eye on exchange rate movements, its chairman Philipp Hildebrand was quoted as saying in an interview published on Swiss website blick.ch on Sunday. "The currency fluctuations of the Swiss franc have indeed picked up in the last weeks. The SNB is following these developments on the foreign exchange market very closely," Hildebrand said when asked if the SNB would intervene again should the euro weaken too much. The Swiss franc has risen to record levels against the euro since the SNB backed off a pledge to fight an excessive appreciation of the franc at its last monetary policy assessment. The SNB sold francs for euros for more than a year as part of its fight against deflationary risks, and Switzerland's currency reserves posted their sharpest rise on record in May. The overall currency reserves rose to 232.4 billion Swiss francs ($219 billion) that month. Hildebrand said, however, that there was currently no threat of inflation, despite the amount of liquidity it had pumped into the market. "At the moment, I see extremely low inflation risks in Switzerland," Hildebrand said. "I have no doubt that we can absorb the high liquidity in time.
We will also be able to decide when to do this so that we don't have to worry about inflation in the medium or long term," he said. Hildebrand also said there had been progress on the "too-big-to-fail" banks issue. A Swiss government commission has called for the country's two big banks UBS and Credit Suisse to change their structure so that they could be broken up in the event of insolvency, and a report on this issue is due in August. Hildebrand also said in the interview the SNB was concerned about a possible real estate bubble. "There is no reason to panic, but also no reason for the all-clear," he said.