SNB Dilemma, IMF Solution
The IMF’s annual report for Switzerland is important for the franc. The IMF makes two key points. First, the Swiss National Bank should continue with its floor target for EURCHF at 1.20 given Switzerland is experiencing deflation and renewed safe-haven inflows could strengthen the franc again. But ‘if confidence in global financial markets takes hold, the SNB should cautiously unwind past interventions, and it should exit the floor if a monetary tightening becomes necessary’.
Click here to read the full report: UBS