GRENCHEN, Switzerland, May 14 (Reuters) - The Swiss National Bank should consider negative deposit rates to help businesses that are struggling under the strong Swiss franc, the chief executive of the world’s biggest watchmaker, Swatch, said on Wednesday.
The SNB capped the franc at 1.20 per euro in September 2011 to help stave off recession and the threat of deflation after investors seeking a safe-haven from the euro zone crisis pushed the currency to record highs.
But the franc remains strong and is putting some Swiss businesses under pressure, including the country’s watch industry which produces almost exclusively in Switzerland and exports most of its products, making its wares more expensive abroad.
Swatch Chief Executive Nick Hayek, speaking after the Swiss company’s annual shareholder meeting in Grenchen in northwest Switzerland, said the SNB should take notice of the European Central Bank, which is reported to be considering negative deposit rates.
“It’s funny that the ECB is proposing these things and I would wonder if the Swiss National Bank would not have thought about trying to go in this direction also,” Nick Hayek told journalists, while smoking one of his signature cigars.
“It’s perhaps the moment to think out loud,” he added. “There are moments to think out loud to put perhaps the people into a certain mood, to create some insecurities for people who think (the cap) will always continue like this,” added Hayek, who has been one of the most outspoken business leaders about the impact of the strong franc. (Reporting by Joshua Franklin; Editing by Elaine Hardcastle)