By Francisco Miñana
Date: Monday 28 May 2012
The Swiss National Bank (SNB) is considering controls on capital inflows as a measure to halt the appreciation of the Swiss franc.
This aggressive measure is being studied by a government-led panel due to concerns that Swiss franc appreciation may pick up if the Eurozone debt crisis escalates. This action would halt the arrival of new deposits from Eurozone citizens as capital pours into safe haven assets.
"The working group focuses mainly on instruments to combat the franc strength based on a joint approach of the government and the central bank," SNB President Thomas Jordan told the SonntagsZeitung newspaper in an interview.
"We also need to be prepared for the possibility of the currency union collapsing, even though I don't expect it," said SNB spokesperson Walter Meier.
The euro/Swiss franc traded at 1.2025 on Monday morning. Rumours of SNB intervention last week led to upside pressure on the currency pair. "The Swiss franc will continue to be seen as a safe haven currency while concerns over Greece leaving the Eurozone are not put to rest", said analysts at Digital Look.
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