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UPDATE 1-SNB says all monetary policy tools at the ready on franc
January 25, 2013 / 6:17 PM / 5 years ago

UPDATE 1-SNB says all monetary policy tools at the ready on franc

* SNB’s Jordan expects Swiss franc to continue easing

* Comments echo SNB colleague Danthine’s of Thursday

* Jordan points to eurozone uncertainty in Swiss franc view (Adds detail)

ZURICH, Jan 25 (Reuters) - The Swiss National Bank continues to keep all monetary policy tools at the ready to keep the still strong Swiss franc in check, chairman Thomas Jordan said in televised comments on Friday.

“We don’t rule out using any monetary policy instruments should they become necessary,” Jordan told Swiss broadcaster SF DRS in an interview. However, he said the SNB expects the franc to continue its recent weakening, which represents a welcome reprieve for central bank, which has intervened heavily to keep the currency from appreciating further.

Jordan did not comment directly on whether the SNB would move a cap of 1.20 francs per euro imposed in September of 2011 to stem the red-hot Swiss currency’s appreciation.

On Thursday, SNB vice-chairman Jean-Pierre Danthine downplayed speculation that the central bank could move the cap to a weaker level.

“The currency cap policy is not designed to allow fine tuning of the level of the cap,” Danthine told the Tribune de Geneve in an interview. [IDD:nL6N0AT5DN]

Until this month the franc had stuck tight to the 1.20 limit, but greater confidence that the euro zone can ride out its sovereign debt crisis has left it floating freely in the past week at about 1.24.

Jordan referred to continued uncertainty in the euro zone, Switzerland’s largest trading partner, in his comments on the franc.

Such uncertainty is expected to continue to drive demand for secure investments like the franc.

The SNB, which imposed the 1.20 limit on the franc to avoid gains driven by the financial sector which could have badly hurt its exporters, had to intervene heavily last year to defend the limit, swelling reserves to 72 percent of national output.

But it has done less since September as a bond buying programme announced by the European Central Bank has paved the way for a calmer tone on financial markets. (Reporting By Katharina Bart; Editing by Toby Chopra)

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