Objective: Outlined in Switzerland's National Bank Act, the objective of the SNB is to ensure pricestability and, in so doing, to take due account of economic developments. The SNB equates price stability with a rise in consumer prices of less than 2% per annum. The SNB uses medium-term inflation forecasts as the main indicator for monetary policy decisions.
As of March, inflation in Switzerland stands at -0.2% Y/Y. Inflation in Switzerland has remained subdued since 2008. Since then, inflation has ranged between a peak of 1.4% in 2010 and a trough of -1.4% in 2015.
Situation: As inflation in Switzerland remains stubbornly low,the SNB Policy Rate is likely to remain as the worlds lowest interest rate at just -0.75%for the foreseeable future.
At their March meeting, the SNB kept rates unchanged, and maintained their view on CHF as "highly valued." Additionally, the SNB reiterated that they are prepared to step up FX intervention as necessary.