UBS CEO Sees No Further SNB Rate Cuts Given Current Franc Level

The Swiss National Bank isn’t likely to cut interest rates again given the franc’s current level, UBS Group AG Chief Executive Officer Sergio Ermotti said.

“At this stage, we don’t expect more negative rates as the parity euro-Swiss Franc stays around 1.08-1.10,” he told Bloomberg Television in an interview. “I think it’s probably the right level for this time. So we’re not planning or forecasting negative rates to expand.”

Since dropping its franc cap of 1.20 per euro a year ago, the SNB has relied on a twin strategy of negative rates and interventions to keep the Swiss currency in check. The deposit rate is currently at minus 0.75 percent, and while SNB President Thomas Jordan has said it isn’t yet at rock bottom, he’s also acknowledged there’s a limit on how much more it can be cut before investors start hoarding cash.

The franc finished last year ten percent stronger against the common currency. It stood little changed at 1.0957 per euro at 7:45 a.m. in Zurich on Thursday.

“We’ve been told it’s overvalued for a long time so that’s how it goes,” Ermotti said.

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