SNB leaves policy rate unchanged at -0.75%, as expected

The SNB is maintaining its expansionary monetary policy with a view to ensuring price stability and providing ongoing support to the Swiss economy in its recovery from the impact of the coronavirus pandemic. 

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

The Swiss franc remains highly valued. 

The 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.

The new conditional inflation forecast for 2021 and 2022 is slightly higher than in March. This is primarily due to higher prices for oil products and tourism-related services, as well as for goods affected by supply bottlenecks. 

In the longer term, the inflation forecast is virtually unchanged compared with March. 

The new forecast stands at 0.4% for 2021, and 0.6% for both 2022 and 2023. The conditional inflation forecast is based on the assumption that the SNB policy rate remains at −0.75% over the entire forecast horizon.

Coronavirus and the measures implemented to contain it are continuing to shape the global economy more than a year after the outbreak of the pandemic. 

The SNB’s baseline scenario for the global economy anticipates that the major advanced economies will ease containment measures further through to the summer. Against this backdrop, the SNB expects strong growth in the second and third quarters. However, the after-effects of the pandemic will continue to weigh on demand for some time yet. 

SNB expects GDP growth of around 3.5% for 2021. The upward revision compared with March is primarily attributable to the lower than-expected decline in GDP in the first quarter. 

Swiss GDP is likely to return to its pre-crisis level by the middle of the year. However, production capacity will remain underutilised for some time yet.

Owing to the pandemic, the forecast for Switzerland, as for the global economy, remains subject to heightened uncertainty.