The Swiss National Bank (SNB) announced that it will maintain the current level of its expansionary monetary policy, following the release of stable macroeconomic data.
Interest on sight deposits at the SNB will remain at –0.75% and the target range for the three-month Libor remains unchanged at between –1.25% and –0.25%. The Swiss central bank still continues the Franc to be overvalued and pledged to intervene in foreign exchange markets if necessary.
The announcement follows the publication of moderately positive data for the Swiss economy. While the SNB revised its growth expectations for the UK and euro area downwards, the Swiss economy posted an annualised growth of 2.5% for the second quarter. The SNB predicts inflation to remain at -0.4% in 2016 but its forecast for 2017 has been revised slightly downwards from 0.3% to 0.2%.
Stefan Große, analyst at Nord LB comments on the results: “The SNB sticks to its current ultra-expansionary monetary policy and does not adjust its monetary policy toolbox. It has very little reason to do so, considering the swift staiblisation of the Franc following the Brexit shock, due to SNB interventions. The Swiss economy continues to stabilise and even manages to overtake growth levels of the German economy. Even inflation levels have improved and are expected to leave the negative territory soon. Thomas Jordan can therefore sit back, relax and wait.”