ZURICH (Reuters) - An interest rate hike by the U.S. Federal Reserve could help the Swiss National Bank in its efforts to keep a lid on the value of the strong Swiss franc, SNB governing board member Andrea Maechler said on Monday.
“A U.S. rate hike could trigger capital flows from Switzerland to the U.S.,” Maechler said in a interview with Swiss broadcaster SRF. “That would of course be good for the Swiss franc.”
Maechler said negative interest rates remained “absolutely necessary” in Switzerland as a way to prevent the appreciation of the currency which the SNB has long described as “significantly overvalued”.
“Without negative interest rates the franc would be much stronger and therefore have a negative effect on the economy and the employment market,” Maechler said.
She said did not rule out a further interest rate cut from the level of -0.75 percent which the SNB has charged since January 2015, although this would be introduced only if “really necessary”, Maechler told SRF.
“We will do that only if the advantages outweigh” the negatives, she said.
Reporting by John Revill; Editing by Michael Shields