Swiss National Bank (SNB) Chairman Martin Schlegel reaffirmed Thursday that while the central bank does not favor negative interest rates, they remain effective and could be reintroduced if necessary.
"At the current juncture we cannot exclude negative interests rates in the future," Schlegel told reporters. "Now with these cuts today the likelihood of negative rates has become smaller." Regarding the Swiss franc's role, the banker noted that negative rates previously helped reduce the currency's appeal during periods of excessive strength. "The SNB looks at the overall franc situation, not just its performance against the euro," he stated.
His remarks come as the SNB has been loosening monetary policy amid easing inflation pressures. Today, the bank announced it had decided to lower its policy rate by 50 basis points (bps) to 0.50%.
