Switzerland’s President Eveline Widmer-Schlumpf said the nation’s central bank can continue to intervene in foreign-exchange markets “for as long as it wants” and that the only limit to franc sales would be inflation.
Widmer-Schlumpf, who is also Switzerland’s finance minister, said at a news conference today that the Swiss National Bank remains independent and “decides alone which is the right level for the Swiss franc.”
Swiss policy makers imposed a ceiling of 1.20 francs per euro to protect the country’s economy on Sept. 6 after the franc reached near parity with the euro, prompting the SNB to purchase euros to stem any appreciation in the currency above that level. Central bank President Thomas Jordan in May said controls on capital inflows were among additional measures being considered by a government-led panel to stop the franc from strengthening.
“The national bank can’t fail,” Widmer-Schlumpf said, adding that “we are prepared to take other measures.”
She also said that the Swiss government “is prepared for the worst, but I don’t think we have to do that.” Inflation would be the only restraining factor on the SNB’s intervention and “if we would have inflation I think they would have to stop that.”
The Swiss president also said a dispute with the U.S. over undeclared accounts held by U.S. taxpayers in Swiss banks may be resolved before the U.S. elections in November.