It has been revealed that Swiss interest rates have achieved a right level. However, if the rates continue to remain very low, it would result in market distortions, especially in real estate. This was reported by the Vice Chairman of the Swiss National Bank.

Vice Chairman Thomas Jordan while speaking to the Swiss newspaper Sonntag on Sunday stated, "At the moment, the interest rate level is correct. However, if interest rates stay so low for a prolonged period markets could experience distortions -- especially in the real estate and mortgage market. We're looking at that closely".

According to reports, Switzerland's Central bank reduced its benchmark interest rate to 0.25% in March 2009. This was done to battle economic downturn that hit the country. At present, Switzerland has emerged out of recession; however, rates continue to remain very low.

The Central Bank has issued caution that such low rates will lead to a housing bubble.

Economists are of the opinion that SNB may increase interest rates later this year.

Contrary to the steps taken in the Euro zone, Swiss mortgage lending and lines of credit to private households was increased during recession.