ZURICH, March 28 (Reuters) - The Swiss National Bank remains committed to its expansive monetary policy to tackle the “highly-valued” Swiss, governing board member Andrea Maechler said on Thursday, as the safe-haven currency hit its highest value against the euro in 20 months.
The euro fell to 1.1170 against the franc on Wednesday, its weakest level since July 2017, driven by risk aversion by investors and doubts about a slowing global economy.
The development gives the SNB no reason to change its policy of negative interest rates or scrap currency interventions, which some analysts expect could be restarted to weaken the franc.
“The franc remains highly valued, the situation in the currency markets fragile,” Maechler said in remarks prepared for an event in Zurich.
“In this environment, negative interest rates as well as the readiness to intervene in the currency markets when it is needed remain necessary,” Maechler said.
The SNB has waged a long campaign to weaken the franc, whose high value weighs on Switzerland’s export-reliant economy.
Economists currently expect the central bank will have to wait at least until the European Central Bank starts its monetary policy tightening — now delayed to 2020, at the earliest — before it begins its own path to normalisation.
The SNB drastically cut back its foreign currency interventions to a “modest” 2.3 billion Swiss francs ($2.32 billion) during 2018, the central bank said in its annual report last week.
During her speech Maechler also spoke about cyber risks, what she called the “dark side” of digital payments. “Cashless payments especially are a tempting target for cyber attackers,” she said.
But many promising solutions are being developed in Switzerland, she said, citing a new internet architecture created at the Swiss Federal Institute of Technology in Zurich which raised the security and reliability of internet communication.
“Handling these risks can create new business opportunities,” Maechler said. “A significantly higher resistance against cyber risks could be an important competitive advantage for Switzerland’s financial location.”
Reporting by John Revill