Central bank defends euro intervention

The head of the Swiss National Bank has defended recent currency market intervention to curb the rise of the Swiss franc against the euro.

Philipp Hildebrand told the Tages-Anzeiger newspaper that if the central bank had not purchased significant amounts of euros in April and May, Switzerland would have run the risk of deflation and unemployment soaring by up to eight per cent.

Both outcomes would not have conformed with the law, he said, and so the central bank had “chosen the right path”.

Hildebrand told the newspaper he drew the conclusion in light of the outlook for the current year, with forecasts of two per cent economic growth in 2010, a falling unemployment rate and stable prices.

Last week the Swiss National Bank reported a loss of SFr2.8 billion ($2.67 billion) for the first half of the year, a result which is better than it expected.

swissinfo.ch and agencies