Swiss National Bank Keeps -0.75% Interest Rate Target

June 18, 2020

The scheduled quarterly monetary policy review at the Swiss National Bank ended with officials leaving their policy rate unchanged at negative 0.75% and doubling down on the need for forceful currency market intervention to counter safe-haven demand and limit the franc’s appreciation. GDP is projected to drop 6% this year in a released statement, and CPI inflation is forecast to slide on average by 0.7% this year and 0.2% in 2021 before edging up 0.2% in 2022. The revised forecast path of on-year CPI inflation is significantly lower than that estimated in the March review, starting with a forecast -1.2% in the current quarter versus the prior estimated of -0.6%. A return to positive inflation was projected in March to likely occur in the first quarter of 2021 but is now not seen happening until the second quarter of 2022. As late as the first quarter of 2023, officials expect inflation to be only 0.4%. No interest rate hikes are anticipated in the forecast horizon.

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



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