What Mr. Jordan doesn't realise is that no matter how low the interest level of the SNB is, the CHF will continue to appreciate because the CHF it's seen as a safe heaven currency. This is because the excesses of the other central banks printing currencies through QEs slowly but surely will depreciate their currencies. The bottom line is that lowering interest rates further will not diminish the attractiveness of the CHF as compared to other currencies.
SNB's Jordan Says Option to Lower Rates Remains on Table
The Swiss National Bank could reduce its already ultra-low interest rates again if the situation warrants, President Thomas Jordan said. With a deposit rate of minus 0.75 percent, the SNB has already enacted the lowest interest rate of any major central bank. That tool is designed to keep pressure off the franc, which is regarded as a safe haven at times of market uncertainty. Still, the Swiss currency hit a 20-month high against the euro at the end of March, and a no-deal Brexit or political turmoil in Italy could intensify appreciation pressure. “We always stress the point that we have room to lower interest rates still further” and ... (full story)
- Posted: Apr 15, 2019 2:53am
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