SNB steers rates on a steady course, USD/CHF renews 3-month lows


  • SNB maintains the no-rate change policy in December.
  • USD/CHF remains in the red at three-month lows.

At its December quarter monetary policy assessment held this Thursday, the Swiss National Bank (SNB) board members decided to leave 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.

In reaction to the SNB’s status-quo, the Swiss franc ticked a few pips higher, with USD/CHF renewing three-month lows at 0.9813.

Summary of the statement

Trade-weighted exchange rate of the Swiss franc is practically unchanged compared with September 2019.

The franc thus remains highly valued, and the situation on the foreign exchange market is still fragile.

Will remain active in foreign exchange market as necessary.

Remains willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration.

Negative interest and the willingness to intervene counteract the attractiveness of swiss franc investments and thus ease the upward pressure on the currency.

Expansionary monetary policy continues to be necessary given the inflation outlook in Switzerland.

International trade tensions and political uncertainty have weighed on the global economy in recent months.

The longer-term forecast is virtually unchanged. For 2019 the forecast stands at0.4%, for 2020 at 0.1% and for 2021 at 0.5%.

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

SNB is maintaining its existing baseline scenario for the global economy.

According to the initial estimate, the swiss economy grew by 1.6% in the third quarter.

Expects momentum to remain modest over the short term.

Monetary policy easing is likely to contribute to the economy – and thus also inflation – picking up again over the medium term.

GDP is likely to expand by around 1% in 2019, and the SNB expects growth of between 1.5%and 2% in 2020.

Imbalances persist on the mortgage and real estate markets.

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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