SNB leaves key rate unchanged at -0.75%, USD/CHF off six-year lows


  • The SNB steers monetary policy on a steady course in December.
  • USD/CHF keeps the recovery mode intact from six-year lows.

The Swiss National Bank (SNB) board members announced a no change to their monetary policy settings after it concluded the December 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.

As the SNB’s decision was on the expected line, the Swiss franc showed little reaction, with USD/CHF keeping its recovery mode intact around 0.8840. The spot hit a six-year low at 0.8827 pre-SNB announcement.

Summary of the statement

The Swiss franc is highly valued.

Will remain active in the foreign exchange market as necessary.

In light of the highly valued Swiss franc, the SNB remains willing to intervene more strongly in the foreign exchange market.

SNB’s expansionary monetary policy provides favorable financing conditions, counters upward pressure on the Swiss franc, and contributes to an appropriate supply of credit and liquidity to the economy.

GDP revision is due to the fact that the decrease in GDP resulting from the first wave of the pandemic was not as substantial as originally expected.

Forecast for Switzerland, as for the global economy, is subject to high uncertainty

Effects of pandemic can be expected to be smaller than in spring given that many countries have opted for less severe containment measures

Swiss containment measures implemented thus far are restricting economic activity less than was the case in the spring. Nevertheless, momentum is likely to be weak in q4 2020 and q1 2021.

Swiss economic growth at around 2.5-3 %

Sees 2020 inflation at -0.7% (pvs forecast -0.6%)

Sees 2020 swiss inflation at minus 0.7 % (previous forecast was for minus 0.6 %)

Sees Q3 2023 conditional inflation at 0.5%

Sees 2021 swiss inflation at minus0.0 % (previous forecast was for 0.1%)

Sees 2021 inflation at 0.0% (pvs f'cast +0.1%)

Sees 2022 inflation at +0.2% (pvs f'cast +0.2%)

Sees 2022 inflation at 0.2 % (previous forecast was for 0.2%)

Sees 2020 inflation at -0.7 % (previous forecast of -0.6 %)

Sees 2021 inflation at 0.0% (previous forecast of +0.1%)

Sees 2022 inflation at 0.2 % (previous forecast of +0.2%)

Sees 2020 GDP at -3% (vs sept forecast of -5%)

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.

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