Swiss National Bank to Be Vigilant with Intervention to Contain Franc Strength

March 19, 2020

The Swiss National Bank‘s sight deposit rate of negative 0.75% since January 2015 was retained at that central bank’s quarterly policy review, and officials characterized the franc as even more overvalued than before, which will necessitate more intense intervention in the FX market. Extra steps are being taken to ensure ample liquidity. Officials do not foresee a rate hike through the entire forecast horizon. They revised projected GDP growth this year to negative territory after having predicted a growth range of 1.5-2.0% at their December 2019 policy review. Inflation also was revised lower for the entire forecast horizon, reaching -0.6% next quarter and getting up only to 0.8% by the third quarter of 2022. The previous forecast for that quarter had been 1.2%.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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