Swiss Central Bank Leaves Monetary Policy Unchanged
September 23 2021 - 1:46AM
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The Swiss National Bank left its expansionary monetary policy
unchanged on Thursday, in order to ensure price stability and
underpin economic recovery from the coronavirus-driven
downturn.
Policymakers of the central bank decided to retain the policy
rate and interest on sight deposits at the SNB at -0.75
percent.
The bank reiterated that it is willing to intervene in the
foreign exchange market as necessary, in order to counter upward
pressure on the Swiss franc. The bank repeated that the Swiss franc
remains highly valued.
The Bank's laser-like focus on the exchange rate means that it
is unlikely to raise interest rates before the European Central
Bank, and so well beyond the end of our forecast horizon, David
Oxley, an economist at Capital Economics, said.
Citing higher prices for oil products as well as for goods
affected by supply bottlenecks, the bank raised its inflation
forecast. The inflation forecast for 2021 was upgraded to 0.5 from
0.4 percent and that for 2022 to 0.7 percent from 0.6 percent.
Inflation is seen at 0.6 percent in 2023, unchanged from the prior
estimate.
On economic activity, the bank observed that momentum has slowed
somewhat. The SNB expects GDP growth of around 3 percent for 2021.
In June, the SNB had assumed a higher growth of around 3.5
percent.
The downward revision is primarily attributable to the
development of consumer-related industries such as the trade
industry and hospitality, which performed less dynamically than
expected.
Regarding mortgage lending and property prices, the bank said
the vulnerability of the mortgage and real estate markets has
increased further.
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