2023-12-14 12:35:00
The Swiss National Bank (SNB) maintained its key rate at 1.75% on Thursday, pausing for the second time in a row. Faced with uncertainties, the issuing institution will “adapt if necessary” its monetary policy and remains prepared to intervene “if necessary” in the foreign exchange market.
After five rate increases decided from June 2022, the SNB opted at the end of September for an initial monetary status quo, believing that it had succeeded in countering “the persistent inflationary pressure” in Switzerland.
Since the summer, consumer prices have in fact marked a sharp decline, going from 1.7% in June year-on-year to 1.4% at the last reading in November. Inflation thus falls within the objective of 0% to 2% sought by the Swiss issuing institute and which it equates with price stability.
Despite this relaxation on the price front, “there is reason to expect that inflation will increase somewhat once more in the coming months due to the increase in electricity prices as well as rents and the increase in value added tax,” warned the Swiss central bank.
“Therefore, the National Bank will continue to carefully monitor the situation and if necessary adapt its monetary policy so that inflation in the medium term remains within the range of price stability,” she added.
The Fed maintains the status quo
This announcement comes as the American Federal Reserve (Fed) decided on Wednesday to maintain the monetary status quo following its last meeting of the year.
In addition to the Fed the day before and the SNB this Thursday morning, the European Central Bank (ECB) and the Bank of England (BoE) must announce their monetary policy decisions later in the day.
Returning to global growth, President Thomas Jordan recalled that “the growth of the United States economy has been solid (and) that of European countries has remained weak.”
“In most countries, inflation has fallen significantly in recent months”, but “as inflation remains above the targets set, monetary policies should, initially, remain restrictive in many countries”, continued the boss of the BNS, according to the text of his speech. According to the latter, “inflationary pressure should further ease.”
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