Negative policy rates prove no deterrent

Negative policy rates have not led to higher investment outflows; SNB intervention has become strategic to push the Swiss franc lower

Eimear Daly, G10 FX strategist, Standard Chartered

Our analysis suggests Switzerland's negative policy rates are failing to curb demand for Swiss assets. Portfolio investment outflows increased during Q1 2015, in the aftermath of the Swiss franc cap removal by the Swiss National Bank (SNB) and subsequent sharp CHF appreciation.

However, in Q2, portfolio investment flows reverted to their previous trend, suggesting Q1 was a temporary anomaly due to the shock of the unexpected policy change. The 12-month average shows net portfolio outflows are no

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