Majority of Swiss Polled Back SNB Currency Operations, SZ Says
A majority of Swiss support moves by the country’s central bank to curb the rise of the franc, SonntagsZeitung reported, citing a poll by market research company Isopublic AG.
Of 1,004 people questioned Aug. 18-20, 63 percent favored action by the Swiss National Bank to halt the currency’s rise even if it leads to a rise in inflation, the newspaper said. More than one out of four, or 27 percent, said the central bank should set an exchange-rate target. The newspaper didn’t provide any margin of error for the survey.
Swiss lawmakers, facing elections in October, have become increasingly concerned that the franc’s 17 percent gain against the euro over the past 12 months will erode exports and hinder growth. Consumers became more pessimistic about the economic outlook and job prospects in July, investor confidence slumped, and Finance Minister Eveline Widmer-Schlumpf on Aug. 17 said the government supports “any measure against the strong franc deemed appropriate by the SNB.”
Goldman Sachs Group Inc. (GS) said in an e-mailed note on Aug. 5 that it cut its Swiss economic-growth forecasts to 1.9 percent from 2.1 percent for this year and to 0.6 percent from 2 percent for 2012.
The central bank, which earlier this month cut borrowing costs to zero and increased bank sight deposits almost sevenfold, left the door open for additional measures to stem the franc’s record-breaking rally. SNB governing board member Thomas Jordan on Aug. 11 said in an interview that the central bank is assessing several options to prevent the franc from appreciating.
The Swiss cabinet expects the SNB to set an exchange-rate target of at least 1.20 francs per euro, SonntagsZeitung also reported today, without saying where it obtained the information.
SNB spokesman Walter Meier declined to comment on the newspaper’s report in response to a request from Bloomberg News. Andre Simonazzi, a spokesman for the government, didn’t immediately respond to a phone call.
The Swiss National Bank came under criticism after it quadrupled its foreign currency holdings as a result of intervening in currency markets over 15 months to June 2010 and suffered a full-year loss of $21 billion after the euro slumped.
“We expect more effective steps very soon, especially interventions in the foreign exchange market,” Ulrich Leuchtmann, head of currency strategy at Commerzbank AG in Frankfurt, wrote in a note on Aug. 18. The SNB’s latest measures have been “disappointing,” he said.
The franc closed at 1.1303 versus the euro yesterday in Zurich after reaching a record 1.0075 on Aug. 9, reflecting investor concern that the euro-area fiscal crisis may worsen. Against the dollar, the franc closed at 78.51 centimes.
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