Swiss reluctant to change franc's floor

WSJ, Dec. 13, 2011, 4:04 a.m. EST
Swiss reluctant to change franc's floor

By Warsaw Bureau
WARSAW -- The Swiss monetary authorities face a dilemma between action for a weaker Swiss franc and a strong reluctance to change the floor for its safe-haven currency too often, said Peter Maurer, the country's deputy foreign minister, Tuesday.

"From the economic and financial point of view, a higher rate than the currently acceptable minimum of CHF1.20 to the euro is justifiable," he's quoted as saying, in an interview with Polish daily Rzeczpospolita, when asked about the possibility of raising the floor to CHF1.30. "At the same time, there's a strong reluctance to change the level too often."

The Swiss National Bank on Sept. 6 said it won't allow the euro to drop below CHF1.20, adding it would defend this level with utmost determination. The move came after the euro nearly hit parity against the franc in August.

Maurer said the floor at the current level is acceptable for Switzerland's economic partners, although "if the SNB listened only to our exporters, for sure it would increase the level, but we're also listening to our partners abroad." The SNB's decision to set the floor at CHF1.20 to the euro has brought a positive stabilizing effect, he added.