ZURICH (Reuters) – Swiss National Bank Chairman Thomas Jordan said in a newspaper interview published on Tuesday that currency markets remain fragile and stuck to the central bank’s current course after political turbulence in Italy sent the Swiss franc soaring.
Jordan made the comments to the Tages-Anzeiger newspaper as the euro fell on Tuesday to a 10-month low, weakening against currencies including the Swiss franc, dollar and yen.
A deepening political crisis in Italy, the euro zone’s third-biggest economy, provoked selling of Italian assets and the euro in developments reminiscent of the euro zone debt crisis of 2010-2012.
“The development in recent days shows the situation in the currency markets remains fragile,” Jordan told the newspaper. “Our monetary policy, with negative interest rates and the readiness to intervene in currency markets when necessary, takes this fragility into account.”
Preceding the Italian crisis, the franc had hit its weakest level in over three years, falling past the 1.20 per euro level defended by the SNB for three years until January 2015 when the SNB abandoned a cap and it suddenly surged.
Even so, Jordan has stuck to the SNB’s pillars of negative interest rates and intervention on grounds that the situation could change from one day to the next.
In the Tages-Anzeiger interview on Tuesday, Jordan also reiterated his opposition to a popular initiative on sovereign money slated for next month that could transform how Swiss lenders operate, saying changes pursued by proponents would be “extremely problematic” and based on “mistaken thinking”.
The vote is on June 10.
(Reporting by John Miller and Angelika Gruber, editing by Michael Shields)