Swiss National Bank Holds Rates at Historic Lows

Market volatility and uncertainty in the euro zone are limiting the options for the Swiss National Bank (SNB), which held rates at the historic low of 0.25 percent Thursday, Chairman Philipp Hildebrand told CNBC.

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"At the moment one of the great sources of uncertainty clearly is the debt crisis in Europe. That's certainly the main factor that adds a new element of uncertainty. But we also have the so-called 'soft patch' in the US and we have generally an outlook internationally that's been adjusted slightly to the downside, so there are a number of other uncertainties, but clearly, the main uncertainty currently is the discussion around the European debt crisis," he said on Thursday.

Many strategists have pushed the Swiss franc as a safe haven currency, and its unusual strength is a concern, Hildebrand said. The euro fell to a historic low against the franc Thursday amid market worries about the situation in Greece.

"Market prices are market prices," he said. "What is true is that we cannot actively participate in seeking a solution for the European debt crisis, and that is a big difference to the crisis in 2008 where we could tackle our own problems. Here in many ways we are dependent on our European partners and colleagues finding their way to stabilize markets and to resolve the problems surrounding Greece and the periphery of Europe."

Hildebrand said that he was confident that European policymakers would find a solution, despite the apparent stalemate in Greece that has led to Prime Minister George Papandreou reshuffling his cabinet and offering to step down.

"The night is always darkest just before dawn," Hildebrand said. "We remain confident that, all the difficulties notwithstanding, Europe will find a way out of this. Clearly all alternatives to finding a solution strike me as worse and that's something we can be hopeful for. At this stage, for Switzerland, obviously the need for Europe to get back to stability is a crucial issue. We can do everything right, but unless Europe can stabilize we will continue to be impacted in every way."

He refused to be drawn on how the private sector should be included in the solution to Europe's debt restructuring.

"I don't think it's up to us to counsel Europe. They've got plenty of very intelligent people who are heavily engaged at the moment and trying to find a solution. The key is to try to reintroduce predictability, and to devise… maybe also game-changing solutions, that manage to change the market psychology," He said. "I think as you can see in virtually all market segments, the uncertainty around how they will proceed weighs heavily at the moment on confidence."

Future interventions in the Swiss franc will principally depend on the inflation outlook, Hildebrand said. The bank raised its inflation forecast slightly from 0.8 percent to 0.9 percent.