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SNB Chairman sees only modest inflation risk in Switzerland - Schweiz am Wochenende

Swiss National Bank (SNB) Chairman Thomas Jordan speaks as he attends a news conference, in Bern

ZURICH (Reuters) - Swiss National Bank (SNB) Chairman Thomas Jordan sees only modest inflation risk in Switzerland as the central bank maintains cautious optimism for global economic recovery, he said in a newspaper interview published on Saturday.

"In Switzerland, we believe the inflation risk is modest," Jordan said in the interview with Swiss newspaper Schweiz am Wochenende. "Until recently inflation here was even negative, meaning consumer prices were falling slightly, now it's back in positive territory. The National Bank expects moderate inflation."

Echoing remarks made on Tuesday, Jordan said the country's economy was not overheating and its monetary policy "appropriate".

"The strong currency also works to dampen inflation. The franc remains highly valued," he said.

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Since 2015 the SNB has charged an interest rate of minus 0.75% on the overnight deposits of commercial banks, and intervened in currency markets to keep a lid on the value of the safe-haven Swiss franc.

Jordan said the SNB hoped to one day come out of the phase of negative interest rates, but such policy remained necessary at the moment.

"It isn't the case that we consider a situation of negative interest rates desirable; it's quite the opposite," he said.

"But in the current environment, without negative interest rates the franc's value would increase markedly, which would massively harm our economy, associated with rising joblessness and negative inflation. That wouldn't help anyone," he added.

(Reporting by Brenna Hughes Neghaiwi; Editing by Kirsten Donovan)