Rate cuts take time to work, says Gehrig
Swiss National Bank vice chairman Bruno Gehrig has played down speculation that the central bank will cut rates again soon.
He told the German-language, Aargauer Zeitung, that rates had fallen sharply already and that cuts needed time to have an impact on the economy.
“It is possible that one has to cut rates again, but perhaps this is no longer necessary,” he told the newspaper in an interview published on Monday.
“You have to be aware that a rate move does not have a quick impact. Also we have cut rates massively already. The three month LIBOR was twice as high a year ago.”
Gehrig added that the Swiss franc’s strength against the euro was hurting some exporters but noted that its rise was not as severe as was the case with some “distortions” in the past. He said a strong currency also paved the way for low interest rates.
“You cannot have your cake and eat it too – that is to have lower interest rates and prevent every (currency) appreciation,” he said.
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