Swiss National Bank Statement
The Swiss National Bank (SNB) is maintaining its expansionary monetary policy. Consequently, it is leaving the target range for the three-month Libor unchanged at 0.00–0.75% and intending to keep the Libor within the lower part of the target range at around 0.25%. It will act decisively to prevent an excessive appreciation of the Swiss franc against the euro.
The signs of an economic recovery are becoming more tangible. The improvement is beginning to assist the Swiss export sector, while the domestic sector is performing well. For 2010, the SNB is now expecting real GDP growth of about 1.5%. However, the revival remains fragile and is associated with uncertainties.
Since December, the SNB’s conditional inflation forecast has remained almost unchanged at an average of 0.7% for 2010 and 0.9% for 2011. This forecast shows that short-term price stability is not threatened. Although the global economy is continuing to recover, it remains fragile. Should more external shocks occur, the danger of deflation cannot be entirely ruled out. However, the inflation forecast shows that the current expansionary monetary policy cannot be maintained throughout the entire forecast horizon without compromising medium and long-term price stability. The forecast is still associated with considerable uncertainties.