FRANKFURT, May 22 (Reuters) - The Swiss National Bank is committed to the cap it imposed on the franc in 2011 but could adjust the level of 1.20 per euro if necessary, said its Chairman Thomas Jordan.
Jordan also told a Frankfurt journalist club the bank did not rule out negative interest rates.
In remarks delivered on Tuesday, but released for publication on Wednesday, he added that talk of a currency war was overblown and Japan was justified in easing monetary policy to get inflation up to target.
The SNB set the cap in September 2011 to prevent deflation and a recession, after investors seeking sanctuary from the euro zone crisis pushed the currency's value up by a quarter in just a few months.
On Wednesday, the franc fell its lowest level against the euro
"The minimum exchange rate will be kept as long as necessary to achieve monetary policy goals," Jordan said in a question-and-answer session after the speech.
"Adjustment of the minimum exchange rate belongs, just like negative interest rates, as a basic principle to possibilities, when it is necessary."
The International Monetary Fund said on Tuesday the SNB should maintain the franc cap given low inflation and growth and the risk of further capital inflows, reiterating it should consider negative rates if the franc jumped.
Jordan also reiterated that the SNB stands ready to buy foreign currency in unlimited quantities if necessary.
"The franc is still highly valued," he said.
Asked whether the LIBOR market interest rate fixing scandal could change the SNB's policy of targeting LIBOR rates with its policy rates, Jordan said the bank was preparing for all possibilities.
"In the current implementation of monetary policy, the LIBOR-band does not have the same meaning as enforcing the minimum exchange rate," he added.
(Reporting by Sakari Suoninen and Andreas Framke, editing by Emma Thomasson, John Stonestreet)
((sakari.suoninen@thomsonreuters.com)(+49 69 7565 1267)(Reuters Messaging: sakari.suoninen.thomsonreuters.com@reuters.net))
Keywords: SNB/JORDAN
