The Swiss National Bank’s President Philipp Hildebrand claimed yesterday that the central bank is firm in its decision to defend franc’s peg to euro.
Hildebrand didn’t unveil the amount of foreign currency purchases the SNB has to make in order to keep EUR/CHF above 1.20 and prevent the national currency from excessive strengthening that affected the nation’s exporters and posed recession risks. According to him, this measure is “totally credible.”
The single currency hit the record minimum versus franc of 1.0065 on August 9. The SNB announced the ceiling for franc on September 6.
Next week the SNB will release currency holdings for September. At the end of August the central bank’s reserves accounted for 253.4 billion francs ($280 billion).
Hildebrand said that though Swiss economic growth will weaken in the second half of the year, the cap will help to lower the threats of recession and deflation. In his view, franc is strongly overvalued.
Chart. Daily EUR/CHF
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