The Swiss National Bank (SNB) kept interest rates unchanged at its meeting on Thursday, December 14, at a negative range of -0.75%, while keeping the target within three months between -1.25% and -0.25%.
The main points of the monetary policy statement were as follows:
- The Swiss National Bank has maintained its current expansionary monetary policy with the aim of stabilizing price developments and supporting economic activity.
- The Bank will remain active on foreign exchange market movements when necessary.
- The Bank will take all changes in the market into consideration.
- Since the last meeting, the Swiss franc has depreciated against the euro.
- Recently, the currency depreciated against its rival the US dollar.
- The appreciation of the franc has started to fall.
- The value of the franc is still fairly high.
- The decline in the currency reflects the decline in demand as a safe haven.
- The bank is willing to intervene in the currency market if necessary.
- These measures make the attractiveness of Swiss franc investments low, easing the pressure on the currency.
- The rise in the value of the currency threatens the growth of prices and economic development.
- Inflation expectations have improved markedly compared to last year's meeting.
- One of the factors that helped improve inflation expectations is the rise in world oil prices and the devaluation of the franc.
- Inflation expectations have not changed in the long term.
- Inflation expectations were raised from 0.4% to 0.5% in the last quarter.
- Inflation expectations were raised in 2018 from 0.4% to 0.7%.
- Inflation is expected to continue growing at 1.1% in 2019.
- Global conditions improved over the last five months.
- The global economy continues to grow at a strong pace over the past period.
- GDP rose by 2.5% during the third quarter.
- The industrial sector is growing in Switzerland.
- Unemployment has fallen in November.
- GDP is expected to grow by 2% in 2018.
