Thomas Jordan, chairman of the Swiss National Bank (SNB), told the NZZ am Sonntag newspaper recently that central bank interest rates might need to go further into negative territory.
Responding to growing criticism of negative central bank interest rates, Jordan said negative interest rates could continue and a further reduction is possible.
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The SNB did not introduce negative interest rates to harm people, said the SNB chairman. However, he still considers the Swiss franc to be highly valued.
Jordan rejected the idea that the public might withdraw their money from banks if interest rates fall further. He thinks the costs and risks associated with storing cash are higher than the costs of current negative interest rates.
Since introducing negative interest rates in 2014, the SNB has made CHF 388 million from them, some of which ends up in cantonal public finances.
On 15 January 2015, the SNB announced that it was abandoning its policy of maintaining an exchange rate cap of 1.20 francs to 1.00 euro. At the same time it increased negative interest on sight deposits from -0.25% to -0.75%.
NZZ am Sonntag article (in German)
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