Excerpt from the Swiss Bank Monetary Policy Committee statement:
An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy. The minimum exchange rate is an important instrument in avoiding an undesirable tightening of monetary conditions. The SNB will therefore enforce this minimum rate with the utmost determination and, if necessary, is prepared to buy foreign currency in unlimited quantities for this purpose.
The SNB’s conditional inflation forecast has been adjusted downwards appreciably over the entire forecast period compared to the previous quarter. In the fourth quarter of 2012, inflation was lower than expected due to the continued decline in import inflation. Furthermore, the economic outlook is once again somewhat subdued, especially for the euro area. The inflation forecast is based on an unchanged three-month Libor of 0.0 percent over the next three years. Under this assumption, the Swiss franc weakens over the forecast period. The SNB is expecting an inflation rate of –0.2 percent for 2013, 0.2 percent for 2014, and 0.7 percent for 2015.
Despite a considerable easing of tensions on the international financial markets, global economic growth was rather weak in the fourth quarter. In Switzerland, economic activity slowed as expected. The unemployment rate rose again slightly, despite a rise in employment. The SNB continues to anticipate growth of 1.0–1.5 percent for Switzerland in 2013.
Downside risks to the Swiss economy remain considerable. There is a risk that tensions in the euro area will increase again. In addition, uncertainty about future developments in the fiscal policies of numerous advanced economies is dampening consumer and investment confidence and poses risks to growth. The global economic situation and sentiment on the financial markets therefore remain vulnerable.