SNB maintains key rate at -0.75%, USD/CHF unfazed at two-month tops


  • SNB leaves policy steady in September.      
  • USD/CHF little changed at two-month highs of 0.9247.

At its September quarter monetary policy assessment this Thursday, the Swiss National Bank (SNB) board members left the monetary policy settings unchanged.

The SNB left the benchmark sight deposit rate unchanged at -0.75%.

The central bank maintained the 3-Month Libor Target Range steady between -1.25% to -0.25%, as widely expected.

On the expected rates on-hold decision by the SNB, the Swiss franc showed little reaction vs. the greenback, with USD/CHF flirting with two-month highs of 0.9247.  

Summary of the statement

Swiss franc is highly valued.

Ready to step up intervention on foreign exchange market as necessary.

New conditional inflation forecast is higher than in June, mainly due to a rise in oil prices.

The SNB remains willing to intervene more strongly in the foreign exchange market, while taking the overall exchange rate situation into consideration.

Longer-term inflation forecast is unchanged.

Forecast for the current year remains negative (−0.6%).

The coronavirus pandemic continues to exert a strong influence on economic developments. the SNB is therefore maintaining its expansionary monetary policy.

Switzerland too experienced a sharp recession as a result of the coronavirus pandemic. In the second quarter, GDP was more than 10% below its pre-crisis level.

Inflation rate is likely to edge back into positive territory in 2021 (0.1%) and increase slightly further in 2022 (0.2%).

Sees strong rise in GDP in the third quarter.

Conditional inflation forecast is based on the assumption that the SNB policy rate remains at –0.75% over the entire forecast horizon.

SNB’s expansionary monetary policy is necessary to ensure appropriate monetary conditions in Switzerland and to stabilise economic activity and price developments.

Positive development is likely to continue in 2021.

The low interest rates provide favourable financing conditions and, coupled with the SNB’s willingness to intervene, counter upward pressure on the Swiss franc.

Anticipates that, as abroad, the recovery will only be partial for the time being.

The CRF and the loans guaranteed by the federal government have together contributed significantly towards ensuring the supply of credit and liquidity to the economy.

Following the easing of containment measures by numerous states, there has been a significant pick-up in economic activity in recent months.

this year, GDP is set to shrink by around 5%. This would be the strongest decline since the crisis in the mid-1970s.

coronavirus pandemic and the measures implemented to contain it have led to a historic downturn in the global economy.

The global economy is expected to experience a robust recovery in the third quarter. Global GDP is nonetheless likely to remain below its pre-crisis level.

in its baseline scenario for the global economy, the SNB anticipates that it will be possible to keep the pandemic under control without a renewed serious impairment of economic activity.

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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