SNB’s Jordan says still too early to alter monetary policy course

By John Revill

ZURICH (Reuters) – An exit from the Swiss National Bank’s ultra-loose monetary policy remains off the agenda despite the Swiss franc weakening to its lowest level in more than three years, chairman Thomas Jordan said on Saturday.

The SNB has stuck to a recipe of negative interest rates and interventions in the foreign currency markets since it scrapped its policy of pegging the franc to 1.20 versus the euro in January 2015.

The franc dropped to 1.187 francs to the euro this week, its weakest level since then, but Jordan said changing course risked renewing upward pressure on the Swiss franc, whose strength weighs on Switzerland’s export-reliant economy.

“For the SNB, it not yet the time to change to change monetary policy,” Jordan told Swiss newspaper La Liberte in an interview published on Saturday.

“Such a change would be premature,” he said. “We do not want to provoke an appreciation of the Swiss franc.”

Jordan said the economic situation had improved from a year earlier, but Swiss inflation still remained very low.

“The situation remains fragile in the foreign exchange market,” Jordan said.

He said the SNB could act independently of the monetary policy of the European Central Bank, which has shown early signs of looking toward tightening.

Still, he acknowledged a change of policy elsewhere could help Switzerland and could open the way to revising the SNB’s current stance.

“For a small open economy like Switzerland, the international environment is very important, especially the key rates of the other central banks, especially those of the ECB,” Jordan said in the interview.

“A normalization of monetary policy at the global level, which is already underway in the United States, would be advantageous for Switzerland and the SNB and would open a certain margin of maneuver.”

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