ZURICH -The Swiss National Bank believes the Swiss franc’s rise above parity versus the euro is unlikely to have a significant impact economically, Chairman Thomas Jordan said in an interview broadcast on Saturday.
The Swiss currency has surged as investors have sought safe-haven assets during the Ukraine war. It rose above 1 franc to 1 euro earlier this month before weakening to around 1.02 francs to the euro. A year ago, a euro bought 1.10 francs.
“From an economic perspective, it’s not got a big importance,” Jordan told Swiss radio station SRF when asked if the franc rising above parity was a level the central bank would fight.
“We don’t give any forecasts where the exchange rate will go, but what’s important is we don’t just look at the euro but all currencies together…and also the inflation differences, that’s very important.”
Higher inflation outside Switzerland had reduced the impact of the stronger franc, he said, with Swiss businesses generally coping well with the currency’s higher valuation.
Swiss inflation has picked up to 2.2%, its highest level since 2008, but remains low compared to the United States and Europe, Jordan said.
The SNB stuck to its expansive monetary policy in its latest update on Thursday, keeping interest rates locked at minus 0.75%, but doubled its inflation forecast for this year.
The central bank would continue to watch inflation closely, Jordan said, and also monitor the developments in the exchange rate.
“The franc remains highly valued…and it is the reason why we remain ready, when necessary, to intervene on the currency markets to prevent the franc becoming too strong,” Jordan said.