The Swiss National Bank's currency cap remains necessary and the central bank won't exclude taking further steps should the crisis in the euro area intensify, its vice president Jean-Pierre Danthine said.
"We find ourselves in a situation in which the franc is still highly valued, and we can't allow a tightening of monetary conditions," Mr Danthine said in an interview yesterday. "It is rather a question whether to be a bit more expansive."
The franc, which investors buy at times of heightened uncertainty, almost touched parity with the euro in August of 2011, threatening to plunge Switzerland into a recession and prompting the SNB to set a cap of 1.20 per euro on the currency.
The euro area remains fragile and the franc could face further appreciation pressure, Mr Danthine said. (Bloomberg)