The Swiss franc remains highly valued against the euro and a further appreciation would harm the economy, said Fritz Zurbruegg, a member of the Swiss National Bank’s governing board.
“A further rise in the franc would have severe consequences for the economy,” Zurbruegg said in Basel today, reiterating the SNB’s latest comments at its March policy review.
The Zurich-based SNB set a cap of 1.20 per euro on the franc in September 2011 to ward off deflation and a recession. The franc had risen strongly against the euro and nearly touched parity the previous month as a result of investor concern about the euro area’s fiscal crisis. The 17-nation currency bloc is Switzerland’s biggest trading partner.
The SNB spent 188 billion francs ($202 billion) on buying foreign currency to defend the ceiling in 2012. Without the cap the economy would have suffered a recession, Swiss policy makers have said. The SNB sees Swiss economic growth of as much as 1.5 percent this year.
The franc was unchanged today, trading at 1.2156 francs per euro at 11:52 a.m. in Zurich. Against the dollar it traded at 93 centimes.
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