More SNB Easing Looks Likely, Incoming Chief Schlegel Says

(Bloomberg) — The Swiss National Bank is likely to continue along its easing path, according to its incoming president, Martin Schlegel.

“We will have an assessment in December again, but from the current junction, it looks like — it is likely that — further cuts could follow,” he told Bloomberg Television. “But there’s no pre-commitment to that.”

The SNB earlier on Thursday lowered borrowing costs for a third straight time, sticking with a quarter-point pace and warning that it’s willing to do more if needed. The reduction brings its key rate to 1% — the equivalent of four standard-sized moves away from zero.

Asked about the central bank’s policy arsenal, Schlegel stressed that the current level gives the SNB “some room” to do more.  

“We also do not exclude any policy measures at the current junction,” he said when prompted on negative interest rates, which the SNB already embraced between 2015 and 2022.

Schlegel — currently vice president — will take over at the central bank’s helm from Thomas Jordan next week and is seen to stand for continuity at the institution. The 48-year-old economist started at the SNB as Jordan’s intern and has followed in his footsteps since.

Schlegel declined to comment on whether the franc is current overvalued, but acknowledged that its persistent strength is a “challenge for some Swiss firms.”

–With assistance from Abigail Morris.

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