Quarterly Review of Swiss Monetary Policy

December 12, 2013

Officials at the Swiss National Bank

  • Decided to retain a zero point and 0.0-0.25% range target on the three-month Swiss libor rate.
  • Retained a 1.2000 franc per euro cap on the exchange rate to be enforced by unlimited intervention and whatever other means prove necessary but noted that intervention hasn’t been needed since September 2012.
  • Declared the current franc’s level to be too high, perpetuating deflationary forces and depressing Swiss competitiveness.
  • Observed that inflation has been mostly negative for the past two years, albeit to only a mild extent.
  • Cut the projected path of future CPI inflation marginally over the entire time spectrum.  Inflation stays under 0.5% through 1Q15, below 1.0% through the end of 2015, and is only at 1.3% in 3Q16, the most distant date shown.
  • Project economic growth of 2.0% next year after between 1.5% and 2.0% in 2013.  Downside risks persist.
  • Expressed mounting concern about the ongoing buildup of imbalances in mortgage and real estate markets, which are being monitored closely.

The released policy statement can be read by clicking here.  SNB President Thomas Jordan delivered the following introductory remarks at a subsequent press conference.

Since the September policy review, the franc has ranged between 1.2200 per euro and 1.2376.  At 1.2232 per euro, it’s currently trading at the pricier end of that range and in fact touched the 1.2200 range boundary earlier today.

Copyright 2013, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.



Comments are closed.