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19
MAR 14

There is another way




The change in the OCR this week and the Grant Spencer (RBNZ Deputy Governor) traffic light comments around (none) currency intervention got me thinking about Switzerland again, so I went back and had a look where the Swiss were at in terms of monetary policy and their currency intervention. There they are still playing a long term game.

"The Swiss National Bank (SNB) is maintaining its minimum exchange rate of CHF 1.20 per
euro. The Swiss franc is still high. The SNB stands ready to enforce the minimum exchange
rate, if necessary, by buying foreign currency in unlimited quantities
, and to take further
measures as required. With the three-month Libor close to zero, the minimum exchange rate
continues to be the right tool to avoid an undesirable tightening of monetary conditions in the
event of renewed upward pressure on the Swiss franc. The SNB is leaving the target range for
the three-month Libor unchanged at 0.0–0.25%" 

The full Swiss National Bank policy Statement can be found here.

This type of thinking would be music to the real economy in New Zealand.
 


tags: ocr, interest rates, currency, exchange rate, swiss, monetary policy, intervention, switzerland
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