ZURICH Dec 12 The Swiss National Bank made the
following statement after its policy review on Thursday:
Swiss National Bank reaffirms minimum exchange rate
The Swiss National Bank (SNB) is maintaining its minimum
exchange rate of CHF 1.20 per euro. The Swiss franc is still
high. The SNB stands ready to enforce the minimum exchange rate,
if necessary, by buying foreign currency in unlimited
quantities, and to take further measures as required. With the
three-month Libor close to zero, the minimum exchange rate
continues to be the right tool to avoid an undesirable
tightening of monetary conditions in the event of renewed upward
pressure on the Swiss franc. The SNB is leaving the target range
for the three-month Libor unchanged at 0.0-0.25%.
In December, the SNB's conditional inflation forecast was
adjusted downwards slightly. On the one hand, the unexpectedly
low rates of inflation for October and November are serving as a
lower departure point for the forecast. On the other, the
decline in inflation in the euro area and the slight fall in the
oil price are also helping to dampen the inflation outlook. As
in the previous quarter, the forecast is based on a three-month
Libor of 0.0% over the next three years. For 2013, the SNB
anticipates an unchanged inflation rate of -0.2%. For 2014 and
2015, the inflation forecast is down in each case by 0.1
percentage points and is now at 0.2% and 0.6% respectively.
Consequently, no inflation risks can be identified for
Switzerland in the foreseeable future.
As expected, the global economic recovery continued in the third
quarter, with the main drivers being the US, the UK and China.
In the euro area, by contrast, growth lacked momentum. In many
emerging economies, too, economic activity was rather sluggish.
For the coming months, the SNB expects a slight increase in
global growth overall.
However, uncertainty about the continued recovery of the world
economy remains high. In many advanced economies, low interest
rates and high government indebtedness are constraining room for
manoeuvre in economic policy and making the global economy prone
to shocks. The forthcoming assessment of banks' balance sheets
in the euro area as well as the Berne, 12 December 2013 Press
release Page 2/3
further course of monetary policy normalisation in the major
currency areas could lead to noticeable spikes on international
In Switzerland, the economy continued to develop favourably in
the third quarter. However, there are signs that growth may
weaken temporarily in the fourth quarter. The SNB continues to
expect growth of 1.5-2.0% for 2013. For 2014, it expects a
growth rate of around 2.0%.
However, given the vulnerable economic situation abroad,
downside risks still prevail for Switzerland.
In an environment of persistently low interest rates, the danger
of a further build-up of imbalances on mortgage and real estate
markets remains considerable. For this reason, the SNB continues
to monitor the situation very closely, and regularly assesses
whether the countercyclical capital buffer should be adjusted.
The statement is on the SNB's website: