- The SNB kept the monetary policy steady in June.
- USD/CHF renews monthly highs at 0.9129 on the SNB outcome.
The Swiss National Bank (SNB) board members kept the monetary policy settings unadjusted at their June quarter monetary policy assessment on Thursday.
The SNB kept the key sight deposit rate steady at -0.75% while maintaining the 3-Month Libor Target Range steady between -1.25% to -0.25%, as widely expected.
Amidst the SNB’s inaction, the Swiss franc fell further, with USD/CHF refreshing one-month highs at 0.9130. The spot gains 0.47% on the day, thanks to the Fed’s hawkish surprise.
Summary of the statement
Swiss National Bank maintains expansionary monetary policy.
Swiss franc remains highly valued.
SNB’s expansionary monetary policy provides favourable financing conditions, contributes to an appropriate supply of credit and liquidity to the economy, and counters upward pressure on the Swiss franc.
New conditional inflation forecast for 2021 and 2022 is slightly higher than in march.
New inflation forecast stands at 0.4% for 2021.
Inflation forecast 0.6% for both 2022 and 2023.
Conditional inflation forecast is based on the assumption that the SNB policy rate remains at −0.75% over the entire forecast horizon.
SNB expects strong growth in the second and third quarters.
Utilisation of global production capacity is therefore likely to only gradually return to normal.
N its baseline scenario for Switzerland, the SNB anticipates a continuation of the economic recovery in the second half of the year.
SNB expects GDP growth of around 3.5% for 2021.
Upward revision compared with march is primarily attributable to the lower-than-expected decline in GDP in the first quarter.
Owing to the pandemic, the forecast for Switzerland, as for the global economy, remains subject to heightened uncertainty.
About SNB Rate Decision
The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.