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MNI SNB WATCH: SNB Holds, Says Inflation, Growth Seen Slower


The Swiss National Bank held its policy rate at 1.75% on Thursday and dropped references to further rate rises and selling foreign currency, saying growth and inflation were slowing “significantly.”

“If monetary conditions become too restrictive, then we will have to adjust monetary policy,” SNB Chair Thomas Jordan told journalists in Berne. The Bank remains willing to intervene in foreign exchange markets on both sides, he said, but today’s announcement that the focus is no longer on the exchange markets and selling foreign currency represents a “major change,” he said. (See MNI INTERVIEW: SNB To Wait Amid Eurozone Slowdown Fears)

November’s inflation of 1.4% was lower than expected, and in large part attributable to goods and tourism services, though price pressures will pick up as a result of energy, rent and VAT rises, Jordan said, adding that “monetary conditions are currently appropriate” despite high levels of uncertainty over the outlook.


Average annual inflation is expected to be within the SNB’s price stability target range of 0-2% across the entire projection horizon, at 2.1% for 2023, 1.9% for 2024 and 1.6% for 2025, compared with September’s assessment of 2.2% for 2023 and 2024, and 1.9% in 2025. (See MNI SNB WATCH: Swiss Rates Set To Be Held As Inflation Dips)

Switzerland’s economy is set to grow by 0.5-1% next year, having averaged around 1% in 2023, with a gradual rise in unemployment anticipated in the coming months. Global growth will likely remain “subdued,” with a risk it could weaken more significantly than assumed, Jordan said.

“Inflation has declined significantly in most countries in recent months,” he said. “Against this backdrop, many central banks have refrained from further monetary policy tightening. With inflation still above the respective targets, monetary policy is likely to remain restrictive in many countries for the time being.”

MNI London Bureau | +44 20 3983 7894 |
MNI London Bureau | +44 20 3983 7894 |

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