SNB’s Maechler: Negative interest rates help ease upward pressure on Franc

SNB Governing Board member, Andrea Maechler, was also on the wires alongside Jordan, noting  the positive impact of negative interest rates.

Key Quotes:

Swiss Franc appreciated only slightly since beginning of the year, this is likely partly due to SNB’s monetary policy

Negative interest rates help maintain interest rate differential between Franc and other currencies, ease upward pressure on Franc

If interest rates in Switzerland were the same as abroad, Swiss Franc investments would “clearly be favoured in the current environment”

Negative interest rate continues to have desired effect on money and capital markets

Most banks have now completely exhausted exemption thresholds on sight deposit holdings

SNB supplying additional Franc liquidity, notably by intervening in forex market, increases banks’ interest rate burden, makes holding francs even less attractive