Seems they are willing to take the credit risk to support their exporters at the expense of the macro economy, rather than cut taxes to sustain domestic demand:

(Dow Jones) — A Swiss National Bank official reiterated Sunday that the central bank will act decisively to prevent excessive appreciation of the Swiss franc against the euro, adding the central bank is taking into account the development of the economy in its entirety.

2 Responses

  1. I don’t know the numbers, but apart from the banks the export industries (machinery, pharmaceuticals, foods, watches etc.) must make up the biggest chunk of GDP? I can’t imagine domestic demand for domestic goods is substantially important or elastic to be worth supporting? Switzerland is its own B-customer. So in face of the inevitable flight into the Swiss Franc that comes with any global financial uncertainty and keeps it artificially high, an active counter policy, at least towards the Euro, seems sensible, no? Something like 80% of Swiss exports go to the EU. We’re stuck with them anyway. Or am I missing something?

  2. I’d prefer a tax cut to support domestic demand and employment rather than purchasing euro. improves real terms of trade and all that

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