SNB surprisingly cuts its Policy Rate by 25bps to 1.50% (exp. 1.75%); FX language reiterated "willing to be active in the foreign exchange market as necessary", Ready to intervene in FX; Loosening permitted by inflation progress
Important
SourceNewsquawk
SectionSNB
via SNB
INFLATION
- For some months now, inflation has been back below 2% and thus in the range the SNB equates with price stability. According to the new forecast, inflation is also likely to remain in this range over the next few years.
- With its decision, the SNB is taking into account the reduced inflationary pressure as well as the appreciation of the Swiss franc in real terms over the past year
- SNB will continue to monitor the development of inflation closely, and will adjust its monetary policy again if necessary to ensure inflation remains within the range consistent with price stability over the medium term.
GDP
- Swiss GDP growth was moderate in the fourth quarter of last year. The services sector expanded again, while value added in manufacturing stagnated. Unemployment rose somewhat further, and the utilisation of overall production capacity was normal.
- Growth is likely to remain modest in the coming quarters. The weak demand from abroad and the appreciation of the Swiss franc in real terms over the past year are having a dampening effect.
SIGHT DEPOSITS
- Sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold, and at 1.0% above this threshold (prev. 1.25%)
FORECASTS
