Swiss National Bank

December 14, 2017

Swiss monetary policy gets reviewed quarterly, which is less frequent than the practice at many other central banks. The current interest rate settings of a negative 0.75% sight deposit rate within a 3-month Libor corridor of minus 1.25% to minus 0.25% dates back to January 2015 when SNB authorities ended an automatic asymmetric Swiss franc target but retained a significant role for currency market intervention on a subjective basis whenever they believe such is needed to counter upward pressure. The latest review expresses guarded optimism in economic developments, welcomes recent depreciation of the franc, and revises projected 2018 inflation upward. But these improvements are viewed as still fragile, justifying a continuing very accommodative stance. ” Therefore, despite the easing of the situation, the negative interest rate and the SNB’s willingness to intervene in the foreign exchange market as necessary remain essential. These measures keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency. A renewed appreciation would still be a threat to price and
economic developments.”

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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