Swiss franc drops in value as central bank presents option

Posted On: August 10, 2011
Switzerland's currency lost value Thursday in response to the vice president of the central bank noting temporarily pegging the monetary unit is one option, Bloomberg reports.

Thomas Jordan's commentary came amid the Swiss franc's rally, which comes one week after national officials intervened to water down the franc's value via monetary easing.

"Any temporary measures to influence the exchange rate are permissible under our mandate as long as these are consistent with long-term price stability," Jordan told Swiss newspaper Tages-Anzeiger in response to a line of questioning regarding a temporary peg. The integrity of his quotation was verified by a spokesman with the Swiss National Bank.

As a haven asset, the Swiss franc is receiving significant investor attention, which policy makers are attempting to stem. As the franc drives toward parity with the European Union's shared currency, the SNB is considering the peg strategy for the first time since 1973, when the currency system was abandoned.

Dow Jones Newswires reports the franc lost value to the euro and the dollar yet the haven asset monetary unit continues commanding support.

Category: Industry News

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