The president of the Central Bank of Switzerland, Thomas Jordan claimed on Monday that the Bank will continue to maintain a minimum rate of EURCHF above 1.20. On a meeting with representatives of Swiss Banks, he announced that in the current situation,a further growth of the Swiss franc is a very serious threat to the Swiss economy and carries the risk of deflation. Jordan added that the economic uncertainty in the Eurozone caused strong concern by the Swiss National Bank and the Government of Switzerland. The Swiss National Bank is ready to take decisive actions to reduce the negative impact of the economic crisis in the Eurozone. Positively, the Bank will continue to defend the minimum rate of the euro against the Swiss franc.
It’s been nearly one year from the moment when the Swiss National Bank set a minimum limit of EURCHF above 1.20. This move was aimed to restrict the excessive growth of the franc after it hit a record level against the euro and the dollar during the summer last year, and now, it is considered to be very successful.
With the increasing concern about the stability of the Eurozone in the first quarter of 2012, the Swiss National Bank held a massive foreign exchange intervention. One year after establishing the level of 1.20 in EURCHF, the general reserves of the Swiss National Bank had increased with a third to 406.5 billion Swiss francs, which is a record benchmark for the history of Switzerland.
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