The Swiss National Bank kept negative interest rates unchanged at -0.75% for sight deposits in December. The SNB made no key changes in their language as they continue to keep negative rates and reiterated that the Swiss franc remains “highly valued”.
Monetary policy assessment of 16 December 2021
Swiss National Bank maintains expansionary monetary policy
- Sight Deposits -0.75% UNCH
- 3-month Libor lower target range -1.25%
- 3-month Libor upper target range -0.25%
Statement Highlights September 2021
- SNB will remain active in FX markets as necessary
- The Swiss franc remains highly valued.
- Prior -0.75%
- Sight deposit interest rate unchanged at -0.75
- Sees 2021 inflation at 0.6% (previously 0.5%)
- Sees 2022 inflation at 1.0% (previously 0.7%)
- Sees 2023 inflation at 0.6% (previously 0.6%)
In Switzerland, the economic recovery has continued. There was a further robust increase in gross domestic product (GDP) in the third quarter, thus lifting it above its pre-crisis level for the first time. The situation on the labour market also continued to improve. GDP is likely to grow by around 3.5% this year. This is slightly stronger than the SNB had expected in September, the reason being that activity in certain service industries – such as hospitality – was more dynamic than was assumed at that time. That said, the economy has lost momentum again somewhat of late.
In its baseline scenario for Switzerland, the SNB anticipates a continuation of the economic recovery next year. This is based on the assumption that no measures will have to be introduced that would additionally impair economic activity. Against this backdrop, the SNB expects GDP growth of around 3% for 2022. Unemployment is likely to decline again
somewhat, and the utilisation of production capacity should continue to return to normal.
SNB Chief Thomas Jordan Press Conference
- No reason to change policy stance
- “Nevertheless, we continue to view the Swiss franc as highly valued,”
- “The reason is inflation abroad, which is at present noticeably higher than it is in Switzerland.”
From The TradersCommunity News Desk