Swiss National Bank

Swiss National Bank

June 18, 2015

As a perennial safe haven, the Swiss economy continues to grapple with the fallout of an overvalued currency related to global uncertainty including the five-year-long Greek debt crisis.  Swiss monetary officials have resorted to negative interest rates and for several years imposed a cap with intervention on the Swiss franc’s euro cross rate.  When that […] More

Fewer Fireworks from the Swiss National Bank as Interest Rate Target Not Changed

March 19, 2015

No central bank created a greater market surprise in the first quarter of 2015 than the Swiss National Bank, whose franc ceiling of 1.2000 per euro was abruptly discontinued on January 15, which hadn’t even been a scheduled policy review.  These are held quarterly.  Monetary policy had been subordinated to an exchange rate policy in […] More

Dollar Climb Resumes with a Vengeance

March 19, 2015

The post-FOMC selloff of the dollar was reversed quickly.  Overnight gains in the U.S. currency topped 1.0% against the euro (1.7%), Swissie (1.3%), and Australian dollar (1.2%).  The greenback also advanced by 0.9% against the loonie, 0.8% versus the kiwi, 0.6% relative to sterling, and 0.5% vis-a-vis the yen, but it’s 0.5% softer against the […] More

Swiss National Bank Removes Cap on CHF/EUR Cross Rate

January 15, 2015

After the central bank had fallen to virtually zero, SNB officials on September 6, 2011 imposed a ceiling on the franc’s cross rate of 1.2000 per euro, which had been maintained until now through threatened and actual unlimited intervention.  That subordination of monetary policy to an exchange rate target was ended today for a variety […] More

Swiss National Bank Lights a Firestorm and India’s Central Bank Also Surprises

January 15, 2015

There’s been a whole lot of shaking going on in world financial markets overnight. Dollar/Swissie plunged 14.2%, and Swiss equities have slumped 9.5%.  The trigger for these big moves was the Swiss National Bank’s abandonment of its 1.2000 franc per euro ceiling, which was imposed initially on September 6, 2011.  The cost of intervention was […] More

Swiss National Bank Re-introduces a Negative Interest Rate

December 18, 2014

Just a week after a quarterly Swiss monetary policy review that left settings unchanged, Swiss authorities in an unscheduled action adopted a negative 0.25% sight deposit rate, versus zero before, and changed the targeted 3-month Swiss Libor target to -0.75% to +0.25%.  The range previously had been 0-0.25% since August 11, 2011, and a one-sided […] More

Fresh Distractions

December 18, 2014

The Yellen press conference gave reassurance to a market unsure of the direction of Fed policy, and it triggered strong gains in stocks and the dollar plus a rebound in long-term interest rates.  But now the market has moved on to new distractions. The Swiss National Bank at an unscheduled meeting and just a week […] More

Swiss National Bank Quarterly Monetary Policy Review Leaves Settings Unchanged

December 11, 2014

The cap on Swiss franc appreciation at 1.2000 per euro, first imposed in September 2011, remains firmly intact, and so will the virtual zero interest rate policy.  The 3-month Swiss Libor target range remains at 0-0.25%, and the point estimate within those boundaries is zero.  Prolonging the duration of this emergency accommodative stance, SNB officials […] More

Swiss National Bank: Review Identifies a Considerable Deterioration of the Economic Outlook

September 18, 2014

The quarterly monetary policy review Revised projected 2014 growth to “slightly less than 1.5% from 2.0%, noting negative annualized growth of minus 0.2% last quarter. Opined that global recovery in coming quarters will be weaker than forecast previously and remains vulnerable to setbacks. Called the Swiss franc “still high” but did not change the 1.2000 […] More

Unchanged Swiss Monetary Policy after Quarterly Review

June 19, 2014

Almost three years have passed since the current policy stance was established to ward off deflation.  On August 3, 2011, the Swiss National Bank sliced the target 3-month Libor interest rate range and point to 0.0-0.25% and “around zero,” respectively.  A month later, officials introduced an asymmetric exchange rate objective, capping Swiss franc strength against […] More

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