ZURICH (Reuters) – Negative interest rates and a readiness to intervene in foreign exchange markets remain “essential,” Swiss National Bank Chairman Thomas Jordan told the central bank’s AGM on Friday, reiterating his long-held approach to managing monetary policy.
The central bank has used both measures to check the Swiss franc’s appreciation, which threatens to upend its goal of price stability.
Despite a recent weakening in the franc, the currency remained “highly valued”, Jordan told shareholders.
“We would like to live in a world where the interest rates are positive. But in the current situation negative interest rates as well as readiness to intervene in the currency markets are essential,” he said.
The SNB currently has a policy interest rate of minus 0.75%, the lowest in the world. Banks, pension funds and savers have criticised negative interest rates, which are increasing their costs and reducing the returns on their investments.
“There will be a day when interest rates become positive again, but I cannot predict when that will be,” Jordan said.
“That depends greatly on…global development, how strong is the economic development, how strong we come out of the current crisis and how the interest rates develop abroad.”
These remain the crucial factors the SNB would have to examine before deciding whether it could change its monetary policy, he said.
(Reporting by John Revill, editing by Thomas Escritt and John Miller)