- If necessary SNB will remain active in FX exchange market to influence monetary conditions
- Franc has been under renewed upward pressure
- Divergence in global monetary policy to continue
- Franc still high, overvaluation has decreased
- SNB still committed to mandate
- Now was the right time to end cap
These comments are mostly repeated from the earlier statement. I’m not sure if his press conference has started as the SNB page where it’s supposed to be isn’t working. Looks like this is a pre-presser briefing and he’ll answer questions after the press conference. Here’s a copy of the introductory remarks
Thomas Jordan at the presser – Try not to smash your trading screens
- Due to international developments it didn’t make sense to keep cap
- Giving up cap necessarily had to be a surprise
- Negative interest rates is a strong instrument that will increasingly show its effects in Switzerland
- It was not a panic reaction but a well thought out decision
- Decision came as a surprise to the market (Winner of the understatement of the year 2015)
- Markets tend to strongly overreact in case of surprises
- Expects situation to correct itself over time
- Didn’t make sense to keep the cap
- Swiss economy has adapted to fx levels
- Expects CHF to ease again from current levels
- SNB takes decisions independently
- Declines to comment on communication with other central banks (was asked by a reporter)
- Won’t comment on and SNB market transactions
- Will intervene on fx markets as is implicit for monetary policy
EUR/CHF 1.2064 USD/CHF 0.8758 GBP/CHF 1.3362
- Key was to gain room to manoeuvre
- Expected a big market movement in reaction to cap exit
- SNB now orienting itself on general fx situation
- Banks won’t pass on negative rates to retail savers
- Monetary policy situation is difficult
- Doesn’t see deflation spiral
- Sees risks of negative inflation in 2015
- Not looking at basket or index of currencies but the exchange rate situation as a whole
- If inflation accelerates monetary policy will be tightened
- Negative rates have helped the the SNB’s cope for action
- Cannot compare situation to 2010/2011 spot intervention
