SNB’s Danthine Welcomes Franc’s Recent Weakening Versus Euro
Swiss central bank Vice Chairman Jean-Pierre Danthine said he welcomes the franc’s recent weakening versus the single currency.
Asked whether he’s happy with the depreciation of the franc against the euro, Danthine told Bloomberg News today on the sidelines of a conference in Lausanne, Switzerland, “of course.” He said that a further weakening will depend on developments in the euro region after the European Central Bank pledged to purchase government bonds along with the area’s rescue fund to fight the fiscal crisis. Still, “markets need to be convinced,” he said.
The franc strengthened against the euro for a fourth day and traded at 1.2088 versus the single currency as of 3:21 p.m. in Zurich. It declined to 1.2184 on Sept. 17, the weakest in eight months.
The Swiss National Bank kept its franc ceiling at 1.20 versus the euro on Sept. 13 and pledged to defend that level with the “utmost determination.” The Zurich-based central bank introduced the measure in September 2011 after the Swiss currency surged to near-parity with the euro.
“Despite a certain easing of the exchange-rate situation over the past week, challenges of the strong franc haven’t yet been diffused,” Danthine said in a speech at the conference. “The expected depreciation of the franc hasn’t yet materialized. Based on this, it’s clear that the SNB will maintain its minimum exchange rate of 1.20 and will defend it with the utmost determination.”
He also said that the Swiss economy will expand about 1 percent this year, and then “gradually gain momentum” in 2013. The Zurich-based central bank last week lowered its 2012 growth forecast from 1.5 percent, without providing an estimate for the following year.
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