“We have room to maneuver for both instruments,” Jordan said at a panel discussion hosted by UBS. It’s clear that we have the possibility to cut rates if necessary.”
The SNB has long used a deposit rate of -0.75% plus a pledge to wage foreign exchange market interventions to keep the franc in check. With pressure on the haven currency rising as a result of the coronavirus pandemic, bank officials said they’d picked up the pace of activity and reserve data back up that claim.
Jordan said any policy step required a cost-benefit assessment and that the SNB would enlarge its balance sheet via interventions if the pros outweighed the cons.
It wasn’t possible to say how long pressure on the highly valued franc would endure, he also said.
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