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SNB: Unchanged monetary and currency policy

March 21, 2014

The Swiss National Bank confirmed its monetary and currency policy, as expected. The central bank pledged to defend its 1.20 ceiling on the franc, saying the currency remains strong and the global economic recovery is beset by risks. While that turmoil has abated, political uncertainty over Ukraine’s Crimea region is renewing pressure on the franc. The target range for its benchmark interest rate unchanged at 0-0.25%.

The SNB reiterated its projection for Swiss economic growth of about 2% this year. However, there are “still substantial risks attached to the global economic recovery,” the central bank commented. Furthermore, the SNB cut its inflation forecast, predicting annual consumer prices to stagnate this year, before climbing 0.4% in 2015. That compares with earlier predictions of 0.2% in 2014 and 0.6% next year. Inflation will accelerate to 1% in 2016. The real-estate market remains another source of concern for the central bank, as its expansive monetary policy has kept borrowing costs for home purchases low. “


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