The Swiss central bank is sticking to its guns and keeps the money flowing freely. It hopes to stop the country’s currency from appreciating even further.
The Swiss National Bank (SNB), Switzerland monetary authority, is keeping its target range for the three-month Libor unchanged at -1.25 percent to -0.25 percent. The bank signaled that it still sees the currency market as its main cause for concern.
«Since the monetary policy assessment of June 2018, the Swiss franc has appreciated noticeably, against the major currencies as well as against emerging market currencies,» the central bank said in its statement on Thursday. «The Swiss franc is highly valued, and the situation on the foreign exchange market is still fragile.»
SNB President Thomas Jordan and his directorate maintain a willingness to intervene in the foreign exchange market as necessary, because a further appreciation is not in the interest of Switzerland’s export industry.
Stabile Inflation
The central bankers can keep flooding the market with cheap money as inflation remains well under the 2 percent rate the bank’s has defined as critical. The SNB expects an inflation rate of 0.9 percent in 2018 and 0.8 percent in 2019.
The expansionary monetary policy as well as a robust global economy have helped Swiss business to flourish. The SNB predicts the economy to grow 2.5 percent to 3 percent this year, well above the estimated potential output.
