The Swiss National Bank should make more efforts to protect Switzerland's economy from the impact of an overvalued franc, economists told several Swiss newspapers. The SNB abandoned its cap on the franc in January and is instead using negative interest rates and interventions in the forex market to reduce the attractiveness of the currency, traditionally viewed as a safe haven by investors.
The Swiss currency soared against the single currency after the 1.20 per euro cap was dropped and remains about 10 percent higher since January.
But as the negative impact of the strong franc on Switzerland's export-driven economy becomes more tangible, calls for the SNB to adjust its course are growing louder. Orders and profits at Swiss industrial firms are suffering and some companies have begun to move activities abroad.
"The National Bank has to weaken the franc," retired economics professor Franz Jaeger told NZZ am Sonntag, adding he and a few other reputable experts had expressed their concerns to SNB Chairman Thomas Jordan.
Jordan said in an interview published on Friday the franc was overvalued but would weaken over time.
Sunday newspaper Schweiz am Sonntag quoted Peter Buomberger, senior economist at think tank Avenir Suisse, asking for a new exchange rate floor.
"If the European Central Bank eases further, the franc will come under pressure again. One has to consider a new exchange rate floor versus the euro because otherwise adjustment costs for the export industry will be too high," Buomberger said.
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