Swiss Government May Consider Negative Interest Rate Policy

By Klaus Wille – Dec 1, 2011 11:10 PM GMT+0000

Switzerland’s government said it may consider additional measures including negative interest rates to aid the country’s central bank in its fight against the appreciation of the Swiss franc.

The government is willing to “examine the feasibility of supporting measures within the context of an overall consideration,” it said yesterday in response to a parliamentary inquiry by Green Party member Louis Schelbert. Part of the supporting measures would be the introduction of negative interest rates, it said.

The franc fell the most in almost a week against the euro today after publication of the government’s comments. Finance Minister Eveline Widmer-Schlumpf said in August that the government would support “any” measure deemed appropriate by the Swiss National Bank to counter gains in the franc. The central bank introduced a cap on the franc in September.

The currency traded at 1.23281 per euro as of 5:22 p.m. today in New York. The franc had earlier fallen as much as 0.7 percent, the most since Nov. 25, before erasing some losses.

The most effective tools to fight excessive exchange rate fluctuations remain in the areas of foreign exchange and monetary policy that are the Swiss National Bank’s responsibility, the government said in its statement yesterday.

Widmer-Schlumpf told Reuters in an interview in October that “at the moment, capital controls and negative interest rates are not a topic but they are being examined. One needs to get ready for certain steps, hoping one will never have to take them,” she said.

One comment

  • Another example of why you stay away from the Swiss Franc if you want a currency. Stick to the Norway currency or the next level which would be Australia or Canada currencies. Another example of Swiss problems is how they’ve pegged the Franc to the Euro. Stay well away and get into Gold.

    -=The Unhived Mind

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