SNB raises policy rate by 25 bps to 1.75%, as expected

  • Prior 1.50%
  • Rate hike is to counter inflation, which has increased again over the medium-term
  • Additional rate hikes cannot be ruled out to ensure price stability
  • In the current environment, the focus is on selling foreign currency
  • Will remain active in the FX market as necessary
  • Sees 2023 inflation at 2.2% (previously 2.6%)
  • Sees 2024 inflation at 2.2% (previously 2.0%)
  • Full statement

No surprises there by the SNB but the franc has weakened a little on the decision as they do forecast a lower inflation outlook for this year. USD/CHF has moved up from 0.8910 near the lows for the day earlier to 0.8950 at the moment. Here’s the forecast graph:

This article was written by Justin Low at Source