ZURICH?The Swiss franc remains " significantly overvalued," and the central bank is willing to intervene in currency markets as needed, a top official of the Swiss National Bank said Thursday.
"Alongside the negative interest rate, our willingness to intervene in the foreign-exchange market as necessary constitutes a key element of our current monetary policy," SNB governing board member André a Maechler said in prepared remarks to a conference in Geneva.
"Nonetheless, the Swiss franc remains significantly overvalued," she said.
The SNB's rate on bank deposits stored at the central bank has been at -0.75% since early 2015.
The Swiss franc has weakened in the past week against the U.S. dollar, which has rallied in the wake of Donald Trump's election as president. The dollar traded at 1.0031 francs late Thursday in Europe, up 2.6% since Nov. 8.
Yet the franc has strengthened against the euro, the currency of Switzerland's main trading partner, the eurozone. The euro fetched 1.0717 francs late Thursday, compared with 1.0780 on Nov. 8.
In her speech, Ms. Maechler also said prices in financial markets occasionally appear "completely disconnected from the real economic environment and, as it were, react only to monetary policy."
"As a result, unexpectedly bad news from the economy is received as good news for the equity markets, because investors interpret the unexpectedly weak economic data as an indicator of continued expansionary monetary policy," she said.
However, she said this occurrence "is only marginally more common today than it was before the financial crisis."
Write to Brian Blackstone at firstname.lastname@example.org
(END) Dow Jones Newswires
November 17, 2016 12:55 ET (17:55 GMT)
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