Swiss central bank ‘can further relax monetary policy’
SNB responds to comments by the IMF that its leeway has been crimped by low interest rates offered by other central banks
Bern — The Swiss National Bank (SNB) can further relax already ultra-loose monetary policy and take its interest rates deeper into negative territory, alternate governing board member Martin Schlegel said on Monday. The central bank charges a rate of -0.75% on cash it holds for commercial banks over a certain limit, one of its tools to combat the rise of the Swiss franc and maintain price stability in the country. It has also intervened in the currency markets to stem the rise in the safe-haven franc, which has risen in recent days to its highest level in 20 months against the euro, creating a headache for the export-reliant economy. The bank drastically cut back its foreign currency purchases in 2018, while the negative interest rates have come under fire from pension funds and banks for reducing their returns. Despite this, the SNB still has room to loosen monetary policy further, Schlegel said, in response to comments by the IMF that its leeway had been crimped by low interest ra...
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