Thomas Jordon, the President of the Swiss National Bank has stated that the Swiss Franc, the major currency of Switzerland is still strong despite of the recent weakness the currency has experienced. According to Jordon, there is some easing in the financial markets at this point of time and hence, the pressure on the Swiss Franc has declined as well. At the current level, Swiss franc is still valued highly and in these uncertain times, the factor cannot be excluded that most of the setbacks are experienced in similar scenarios.
Swiss Franc has been regarded as a haven in comparison with Euro, mainly because of the heightened global stress, as per a study published by the Swiss National Bank in last April. This has pushed the Swiss Franc near parity with Euro in 2011 and therefore the Central Bank was forced to set a ceiling of 1.20 against Euro in September, 2011 for warding off the deflation and a recession.
On last month, Jordon commented that a shift in the cap and the negative interest rates were two steps that the Swiss National Bank could take and this prompted Swiss Franc to weaken past 1.26 per Euro for the first time in the last couple of years on 22nd May.
According to Jordon, the Swiss National Bank is not excluding any measurements under its principal which will help the bank to ensure that the proper monetary conditions are maintained. Apart from that, he mentioned that the Central Bank’s policy on the Swiss Franc ceiling is definitely one of the fine tuning ones. Jordon feels that the cap has given the Swiss companies some sort of security in planning. However, dealing with the exchange rate is still a big deal for the Swiss companies.
On 31st May, Swiss Franc was at 1,2414 per Euro. The currency has experienced a retreat of2.7% against Euro in 2013, till this date. When it comes to USD, Swiss Franc has closed at 95.51 Centimes.
The real estate market of Switzerland is currently experiencing the biggest gains of the same in the last 2 decades. The Swiss National Bank has held the benchmark interest rate of the same at zero since August, 2011. Jordon thinks that the property market is showing very dynamic development, yet, there is risk that things turn out to be a bubble ultimately.