SNB Sees Inflation Breaching Goal But Won't Rush to Raise Rates
- Deposit rate stays at -0.75 percent, as forecast by economists
- Consumer-price growth estimated at 2.1% in third quarter 2020
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The Swiss National Bank said inflation will breach its goal in late 2020 thanks to the franc’s depreciation, but argued even talking about normalizing policy would be premature.
The forecast creates a challenge for the central bank, as it’s wary of taking any aggressive steps that could attract investor inflows and reverse the currency’s direction. On Thursday, policy makers kept the deposit rate at a rock-bottom minus 0.75 percent and said they’ll intervene in currency markets if needed. While noting the franc’s move, they added that it’s still highly valued and loose policy remains the right stance for now.