That's not true. They care about the strength of the Swiss Franc against a basket of world ccies, i.e. the level of trade-weighted CHF. Obviously, EUR has a large weight in the basket, but that doesn't mean that they only buy EURCHF. In fact, in the latest episode, they were on the bid in USDCHF only.
hi Martinghoul,
When I said their ''stated policy'' I was referring to this. I highlighted the bits I was referring to.
regards,
UPDATE: Swiss Central Bank Sounds Deflation Alarm, Targets Franc
By William L. Watts
LONDON (Dow Jones) -- The Swiss National Bank on Thursday said it would take exceptional steps to prevent a deflationary spiral,
including intervention in foreign-exchange markets to arrest the Swiss franc's rise versus the euro.
As expected, central bank policymakers decided at their regular meeting to cut the SNB's key lending rate and narrowed the target range for three-month Libor by 25 basis points to a range of 0% to 0.75%. The SNB said it would use "all means at its disposal" to bring the Libor rate down to the lower end of the range at approximately 0.25%.
The Swiss franc, meanwhile, tumbled after the SNB said it would wade into currency markets to halt the Swiss franc's long-running rise versus the European single currency. The franc has been on the rise versus the euro since the global financial crisis took hold in August 2007, and has accelerated its momentum since last December, the central bank said.
"Under the present circumstances, this represents an inappropriate tightening of monetary conditions," the SNB said in its statement. "
In view of this development, the SNB has decided to purchase foreign currency on the foreign exchange market, to prevent any further appreciation of the Swiss franc against the euro."
The euro soared versus the franc, jumping 3.2% to $1.5269 francs, its highest level against the Swiss unit since December.
The bank also slashed its growth forecast and said it now expects real gross domestic product to fall by 2.5% to 3% in 2009, compared to a previous forecast for a contraction of 0.5% to 1%.
The bank also expects a negative inflation rate of 0.5% in 2009, followed by a rate of around 0% in 2010.
A more severe deterioration of the economy could result in negative inflation, the central bank said, warning that a "period of negative inflation is not compatible with the objective of maintaining medium-term price stability. Any tightening of monetary conditions is inappropriate in this depressed environment," the SNB said.
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(END) Dow Jones Newswires
March 12, 2009 09:51 ET (13:51 GMT)