SNB chief says there is no currency war

* Talk of currency war is an exaggeration

* SNB aims for price stability, no exchange rate target

GENEVA, Oct 30 (BestGrowthStock) – It is an irresponsible
exaggeration to say the world is in a currency war, even if
countries have their differences over adjustment policies, the
head of the Swiss National Bank said on Saturday.

Among a series of tensions over exchange rates The United
States and other countries have been calling on China to
revalue, while China has criticised the U.S. easy monetary
policy for weakening the dollar and flooding the world with
cheap assets.

“We are not in a currency war. After all, we’re talking to
each other and you don’t do that in a war,” SNB Chairman Philipp
Hildebrand said in an interview published on Saturday on the
website of the German daily Frankfurter Allgemeine Zeitung


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Hildebrand agreed that adjustments in exchange rates could
be one of the measures needed to get out of the current
difficult situation for the global economy.

But a significant appreciation of the Chinese yuan could not
occur overnight, he said.

In any case a sudden such move would hurt the Chinese
economy’s growth prospects which would not be in the interests
of other countries, including the United States.

Commenting on criticism by some countries of the easy
monetary policy of the Fed, which is widely expected next week
to embark on another round of quantitative easing — printing
money to buy bonds and drive down interest rates — Hildebrand
said he was confident the Fed would take into account the global
impact of its actions.

But he noted that unlike the European Central Bank or SNB,
the Fed has a mandate to promote employment as well as price

Turning to the SNB’s own interventions to hold down the
franc, which stopped in June, Hildebrand said the Swiss central
bank did not have a currency target, but had sold francs in
pursuit of its goal of price stability, specifically to avoid
deflation which could create an economic crisis.

The impact of the stronger franc on Swiss business has so
far been muted. Hildebrand said Swiss companies were flexible
and it would anyway take some time for the appreciation to have
an effect.

“Meanwhile we can see that exports are no longer having a
positive stimulus on growth,” he said, repeating the SNB’s view
that growth will now slow, especially in the first half of next

Stability in Europe, Switzerland’s biggest market, was also
a major factor on the franc exchange rate, he noted.
(Reporting by Jonathan Lynn; editing by Ralph Boulton)

SNB chief says there is no currency war