"once economy mends" = with 2% inflation yes, they can do it
- #6,684
- May 8, 2012 3:42pm May 8, 2012 3:42pm
- | Commercial User | Joined Sep 2005 | 2,784 Posts
I totally agree
The bad thing is that, before go up, it would take out all the stops in the 19xx area.
What what what a joke is this
Whatever with retail traders account , the Swiss economy isn’t ready to drop the floor- the inflation at 2% isn’t saying much about the condition of the export/import for which the eur/chf value is most important. Which further more is connected to GDP and so on and so on… I believe that they will be ready(and delete the peg) when EU will take care of their mess(and the rest of the world preferably too 
), and Euro naturally will go up – but how fast I can’t say, may take years.
), and Euro naturally will go up – but how fast I can’t say, may take years.
- #6,688
- May 8, 2012 3:53pm May 8, 2012 3:53pm
- | Commercial User | Joined Sep 2005 | 2,784 Posts
Whatever with retail traders account , the Swiss economy isn’t ready to drop the floor- the inflation at 2% isn’t saying much about the condition of the export/import for which the eur/chf value is most important. Which further more is connected to GDP and so on and so on… I believe that they will be ready(and delete the peg) when EU will take care of their mess(and the rest of the world preferably too
ready to take further measures at any time. "
periodinflation
march 2012-0.954 %
february 2012-0.883 %
january 2012-0.789 %
december 2011-0.717 %
november 2011-0.526 %
october 2011-0.113 %
september 20110.486 %
august 20110.192 %
july 20110.472 %
june 20110.564 %
Wake up SNB!!!! Take this further measures!!!
don't be lazy
- #6,690
- May 8, 2012 3:59pm May 8, 2012 3:59pm
By Ian Talley
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--
The Swiss National Bank's decision to set a floor on its foreign exchange rate was appropriate, but may require further monetary expansion (!!!
)
and spur excessive inflation and asset price bubbles, the International Monetary Fund said Tuesday.
Switzerland's central bank last year said it would defend a floor value of CHF1.20 against the euro after safe-haven flows into the country had made the franc the most appreciated currency among advanced economies.
"The introduction of the floor was appropriate in light of the growth and deflationary risks and limited alternative policy options," IMF staff said as part of its annual review of the economy.
"The exchange rate floor, seen as credible by the markets, has halted appreciation and helped shore up the economy," staff said.
The IMF said the policy should contain mounting contractionary and deflationary pressures in the country. The fund expects the Swiss economy to grow by 0.8% this year, after growing by an estimated 1.9% in 2011. Next year, the IMF expects the economy to expand by 1.7%.
Fund staff said the Swiss economy is fundamentally strong, but faces ongoing headwinds from the euro debt crisis and a strong currency. Those dynamics have created deflationary pressures and forced the central bank to abandon its floating exchange rate regime.
The IMF expects ongoing pressure on the franc, particularly if the euro area crisis deepens. "The lingering uncertainty in the FX markets, especially on the long end, and latest change in dynamics indicate that the SNB's resolve may be tested in the future," staff said.
That would likely entail "large-scale" monetary expansion to defend the floor, potentially fueling excessive inflationary pressures. It could also heighten the risk of a bubble in the housing market, where conditions are already "frothy" in some areas, the IMF said.
Those risks could be mitigated through a careful exit strategy and financial system management, the IMF said. Also, Switzerland "urgently" needs to implement a broad set of financial policies (
) to address rising mortgage market risks, staff said.
The fund economists warned that other countries, seeing the Swiss National Bank's success, may try emulate the policy moves. But many economies, especially emerging markets, don't have either the credibility that Switzerland has, or the same depth of policy tools and dynamics that would allow successful copying.
Swiss monetary policy will likely aid neighboring countries such as Austria, Hungary and Poland, which have a large share of domestic credit denominated in francs, the IMF said. Since most of those borrowers are unhedged, the strength of the franc has exacerbated financial strains in those countries. "The SNB move should prevent a further worsening of credit market conditions in these countries," the IMF said.
But the IMF said that once growth recovers and inflation reaches more comfortable levels, since maintaining the exchange rate commitment risks stoking inflation, "a return to free floating would be desirable."
IMF board directors acknowledged the dual risks of removing the exchange rate floor too soon or maintaining it for too long in the face of persistent capital inflows, encouraging the central bank "to exit from the current arrangement with great care."
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)--
The Swiss National Bank's decision to set a floor on its foreign exchange rate was appropriate, but may require further monetary expansion (!!!
)and spur excessive inflation and asset price bubbles, the International Monetary Fund said Tuesday.
Switzerland's central bank last year said it would defend a floor value of CHF1.20 against the euro after safe-haven flows into the country had made the franc the most appreciated currency among advanced economies.
"The introduction of the floor was appropriate in light of the growth and deflationary risks and limited alternative policy options," IMF staff said as part of its annual review of the economy.
"The exchange rate floor, seen as credible by the markets, has halted appreciation and helped shore up the economy," staff said.
The IMF said the policy should contain mounting contractionary and deflationary pressures in the country. The fund expects the Swiss economy to grow by 0.8% this year, after growing by an estimated 1.9% in 2011. Next year, the IMF expects the economy to expand by 1.7%.
Fund staff said the Swiss economy is fundamentally strong, but faces ongoing headwinds from the euro debt crisis and a strong currency. Those dynamics have created deflationary pressures and forced the central bank to abandon its floating exchange rate regime.
The IMF expects ongoing pressure on the franc, particularly if the euro area crisis deepens. "The lingering uncertainty in the FX markets, especially on the long end, and latest change in dynamics indicate that the SNB's resolve may be tested in the future," staff said.
That would likely entail "large-scale" monetary expansion to defend the floor, potentially fueling excessive inflationary pressures. It could also heighten the risk of a bubble in the housing market, where conditions are already "frothy" in some areas, the IMF said.
Those risks could be mitigated through a careful exit strategy and financial system management, the IMF said. Also, Switzerland "urgently" needs to implement a broad set of financial policies (
) to address rising mortgage market risks, staff said.The fund economists warned that other countries, seeing the Swiss National Bank's success, may try emulate the policy moves. But many economies, especially emerging markets, don't have either the credibility that Switzerland has, or the same depth of policy tools and dynamics that would allow successful copying.
Swiss monetary policy will likely aid neighboring countries such as Austria, Hungary and Poland, which have a large share of domestic credit denominated in francs, the IMF said. Since most of those borrowers are unhedged, the strength of the franc has exacerbated financial strains in those countries. "The SNB move should prevent a further worsening of credit market conditions in these countries," the IMF said.
But the IMF said that once growth recovers and inflation reaches more comfortable levels, since maintaining the exchange rate commitment risks stoking inflation, "a return to free floating would be desirable."
IMF board directors acknowledged the dual risks of removing the exchange rate floor too soon or maintaining it for too long in the face of persistent capital inflows, encouraging the central bank "to exit from the current arrangement with great care."
- #6,691
- May 8, 2012 3:59pm May 8, 2012 3:59pm
- | Joined Feb 2012 | Status: "May the odds be ever against you" | 457 Posts
I think he's view is the same as our
Painful to be on this ship for now..
UK is building new titanic if someone heard about it.. on same model..
Let's C destiny of that ship and bet on it..
- #6,692
- May 8, 2012 4:02pm May 8, 2012 4:02pm
- | Commercial User | Joined Sep 2005 | 2,784 Posts
I like titanic image.. I cut my losses slowly.. on this pair.. and no position on it..
Painful to be on this ship for now..
UK is building new titanic if someone heard about it.. on same model..
Let's C destiny of that ship and bet on it..
"Swiss monetary policy will likely aid neighboring countries such as Austria, Hungary and Poland, which have a large share of domestic credit denominated in francs, the IMF said. Since most of those borrowers are unhedged, the strength of the franc has exacerbated financial strains in those countries. "
Almost the topic of my bachelor's paper
Almost the topic of my bachelor's paper
