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Swiss National Bank mulls coronavirus response amid recession fears: Maechler

ZURICH (Reuters) – The Swiss National Bank (SNB) is mulling its response to the coronavirus outbreak as it continues to study whether the epidemic will be a short-lived phenomenon or if it will send global growth into a lasting tailspin, a top official said on Tuesday.

SNB governing board member Andrea Maechler said the “big question” is if there will be only a quick, ‘V-shaped’ dip in China and elsewhere or a prolonged ‘U-shaped’ recession prompted by global supply chain chaos, deteriorating consumer sentiment and plunging demand that takes much longer to rebound.

The Swiss central bank releases its next monetary policy assessment on March 19. Maechler said that at that time, the three-member board will announce its updated approach to mitigating damage from the rapidly spreading virus that has killed more than 3,000 people, infected some 90,000 and prompted the U.S. Federal Reserve on Tuesday to cut interest rates.

“We will revise our assessment, or at least we will look over our forecasts, and that will happen in two weeks,” Maechler said at an event in Zurich. “We have a monetary policy based on two important pillars: negative interest rates and our readiness to intervene in currency markets. And we’ll see what is needed to achieve the most optimal monetary policy for Switzerland.”

(Reporting by John Miller; Editing by Chizu Nomiyama)