Fritz Zurbruegg, Vice President at Swiss National Bank spoke yesterday in Zurich. He reiterated the SNB stance from latest monetary policy statement, saying that Swiss Franc is currently overvalued. In his opinion CHF is likely to weaken as SNB is going to keep interest rates at negative levels and maintain its willingness to intervene on the FX market.
Furthermore Zurbruegg sees a rebound in global economic growth as a factor reducing the negative effect of strong local currency.
CPI is expected to be back above 0% in the medium term, putting and end to deflation. Although monetary authorities are going to keep policy accommodating, they are aware that maintaining low interest rates for too long could be a increase the probability of financial stability risks arising in the economy.