Switzerland Monetary Policy


Switzerland: Central Bank affirms minimum exchange rate

June 20, 2013

At its 20 June monetary policy meeting, the Swiss National Bank left the three-month Libor target rate at the historically-low range of 0% to 0.25% established in August 2011, in a decision widely expected by the market. The Swiss National Bank (SNB) also reiterated its intention to maintain the 1.20 CHF per EUR cap established in September 2011, arguing that "an appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy", while adding that "the SNB stands ready to enforce the minimum exchange rate, if necessary, by buying foreign currency in unlimited quantities, and to take further measures, as required".

In its accompanying statement, the Bank underlined that the global economy remains weak, as the Eurozone remains mired in recession, the recovery in the U.S. economy is hesitant and growth in China is showing signs of losing momentum. Meanwhile, the Bank warned that after a healthy increase in the first quarter, the economy is likely to weaken in the second three-month period. Regarding price developments, monetary officials continue to expect inflation to remain low "in the foreseeable future". Moreover, the Central Bank stated that risks for the economy remain high, mainly as ultra-low interest rates are likely to fuel imbalances, especially in the real state market.

FocusEconomics Consensus Forecast panellists expect that the Swiss National Bank will stay put in both 2013 and 2014, with interest rates remaining unchanged at the current range of between 0% to 0.25%.

Author:, Senior Economist

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Switzerland Monetary Policy Chart

Switzerland Monetary Policy June 2013

Note: 3-month Swiss Franc LIBOR target in %. Current rate is set at a range of between 0% and 0.25%.
Source: Swiss National Bank (SNB).

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