Switzerland Holds Monetary Policy Unchanged in June


The Swiss National Bank left the target range for the Swiss Franc Libor unchanged at 0.0–0.25 percent on June 20th. The bank also kept the minimum exchange rate at CHF 1.2 per euro as currency remains too strong and risks are still high for the economy.

Excerpt from the Swiss Bank Monetary Policy Committee statement:

In the current environment, the minimum exchange rate remains important in order to avoid an undesirable tightening of monetary conditions for Switzerland in the event of sudden upward pressure on the Swiss franc. The SNB stands ready to enforce the minimum exchange rate, if necessary, by buying foreign currency in unlimited quantities, and to take further measures, as required.

The SNB’s conditional inflation forecast has remained almost unchanged, apart from inflation for the current year, which is slightly lower due to a reduction in the oil price. For 2013, the SNB now anticipates slightly lower inflation of -0.3 percent. For 2014, the inflation forecast is unchanged at 0.2 percent and for 2015, at 0.7 percent. Consequently, inflation in Switzerland will remain very low in the foreseeable future.

The risks for the Swiss economy remain high. They continue to originate, for the most part, from the international environment. A weakening in global economic momentum cannot be excluded. Further developments in the euro area financial and sovereign debt crisis remain uncertain. Tensions can reappear at any moment on global financial markets. Domestically, there is a risk that the imbalances on the mortgage and real estate markets will grow, given the sustained period of exceptionally low interest rates. 

SNB | Nuno Fontes | nuno@tradingeconomics.com
6/20/2013 10:59:06 AM