Central Bank of Switzerland considers the franc considerably overrated

The Swiss franc remains "significantly overvalued" against the euro and the Swiss central bank remains ready to intervene, if necessary, to stop the strengthening of the currency, said the head of the Central Bank on Tuesday.

the franc to the euro declined on Tuesday to 1,116 francs, being close to the lowest level since since the Swiss National Bank (SNB) has canceled the ceiling of 1.20 in euro / franc more than a year ago.

Speaking at the Swiss Press Club, the head of the SNB Tomas Yordan said that the negative interest rates, the willingness of the central bank to step in and revaluation of the national currency led to a decrease in the value of the franc in the past few weeks.

He declined to say whether the SNB intervention conducted in recent years, and noted the instability of economic conditions.

"The situation still involves significant risks. There is a possibility that the structural adjustment in China will continue to put pressure on manufacturing activity and investment in the world", - he said.

"Negative interest rates have allowed us to re-establish the traditional spread between interest rates in Switzerland and other countries. Negative rates, and our willingness to intervene in the currency market should reduce the pressure on the franc. Thus, our monetary policy is contributing to the stabilization of prices and support economic growth".

Chapter SNB said that he understands the concerns of exporters and retailers in Switzerland, who have lost customers due to the strong Swiss franc due to the fact that they prefer to spend the euro by more favorable for shopping Germany and France. "We understand that many companies still face stiff market conditions"- he said Jordan told reporters. He added that the volume of exports and prices have shown that many companies have cut prices due to the strong currency in recent months.