Bloomberg News

Schneider-Ammann Says Swiss Central Bank to Defend Franc Cap

May 02, 2012

Swiss Economy Minister Johann Schneider-Ammann praised the franc’s cap against the euro and predicted the central bank would defend the policy.

“I am satisfied that this limit exists,” Schneider-Ammann told reporters today in Brussels after meetings with European Union officials. “I am very confident and convinced that the national bank will in fact defend the limit as it has said it would.”

The Swiss central bank has said it’s ready to protect the currency ceiling of 1.20 per euro as Europe’s fiscal crisis clouds the region’s growth prospects, making Switzerland’s economy more attractive for investors. The franc is considered a haven in times of global turmoil.

The Swiss National Bank said at its quarterly assessment in March that it expects the economy to expand about 1 percent this year. By contrast, the European Commission projected in February that the euro-area economy would contract this year for the first time since 2009.

SNB President Thomas Jordan said on April 27 that policy makers are ready to take further measures if needed to weaken the franc as its strength poses “major challenges” to the economy. The ceiling was introduced last September.

“It was an absolute necessity,” Schneider-Ammann said today.

To contact the editor responsible for this story: Jonathan Stearns at jstearns2@bloomberg.net


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