- The SNB maintained stable monetary policy in June.
- USD / CHF renews monthly highs at 0.9129 following the SNB announcement.
Members of the board of directors of the Swiss National Bank (SNB) kept monetary policy guidelines unadjusted in their June quarterly assessment on Thursday.
The SNB kept the key deposit rate stable at -0.75%, keeping the 3-month Libor target range also unchanged between -1.25% to -0.25%, as widely expected.
Amid the SNB’s inaction, the Swiss franc fell further, with the USD/CHF refreshing month-long highs at 0.9130. The pair is up 0.47% on the day, thanks to the upbeat surprise from the Fed.
Monetary policy statement
The Swiss National Bank maintains an expansionary monetary policy.
The Swiss franc continues to be highly rated.
The SNB’s expansionary monetary policy provides favorable financing conditions, contributes to an adequate supply of credit and liquidity to the economy and counteracts the upward pressure on the Swiss franc.
The new conditional inflation forecast for 2021 and 2022 is slightly higher than that of March.
The new inflation forecast stands at 0.4% for 2021The inflation forecast will be 0.6% for both 2022 and 2023.
The conditional inflation forecast is based on the assumption that the SNB policy rate remains at −0.75% throughout the forecast horizon.
The SNB expects strong growth in the second and third quarters. Therefore, the utilization of global production capacity is likely to gradually return to normal.
In its baseline scenario for Switzerland, the SNB anticipates a continuation of the economic recovery in the second half of the year.
The entity expects a GDP growth of around 3.5% by 2021.
The upward revision compared to March is mainly due to the lower-than-expected drop in GDP in the first quarter.
Due to the pandemic, the forecast for Switzerland, as well as for the world economy, remains subject to greater uncertainty.
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