Wednesday, Swiss National Bank Governing Board member Thomas Jordan said the initial impact of the unconventional measures has been positive.

In a speech in Zurich, Jordan said risk premiums in the money and capital markets have fallen slightly and the tendency of the Swiss franc to appreciate against the euro has been checked and volatility is declining. Curbing the upward pressure on the Swiss franc helps to protect against deflation risks in Switzerland, he added.

The SNB is maintaining its ability to act at times of zero interest rates by making use of three unconventional measures: increasing the number of long-term repo transactions, purchasing Swiss franc bonds issued by private sector borrowers and buying foreign currency on the open market.

Jordan said the Swiss economy is currently experiencing the most severe economic crisis since the mid-seventies. If the economies of our most important trading partners recover, and if the financial markets begin to stabilize, it is likely that the Swiss economy will also pass through the cyclical trough during the course of the year 2010.

Saying that the SNB's measures are aimed at reducing the danger of deflation in Switzerland, he asserted that exiting from the current zero interest rate policy would be critical to maintain price stability in the future.

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