Swiss central bank rejects ‘creative’ demands to change course
The Swiss National Bank is not prepared to release any further reserves.
Keystone / Martin Ruetschi
The Swiss National Bank (SNB) continues to beat off demands to fight inflation by raising interest rates and to distribute more reserves to cantons and other causes.
This content was published on
3 minutes
swissinfo.ch/mga
Português
pt
Banco central suíço rejeita demandas “criativas” para mudar de rumo
SNB president Barbara Janom Steiner showed signs of frustration in a speech on Friday that defended the policies of the central bank.
“There are ever more varied proposals – and indeed, increasingly, demands – for potential uses to which the SNB’s assets or profits might be put,” she saidExternal link. “There is understandably no limit to the creativity exhibited by the authors of such proposals. I believe, however, that it would be anything but a good idea to meet these demands.”
At present, the Swiss National Bank (SNB) distributes up to CHF6 billion ($6.5 billion) between cantons and the federal government during profitable years. The SNB made a 2021 profit of CHF26.3 billion ($27 billion).
But there have been calls for this contribution to be raised and for reserves to be put to use in other areas. In February, trade unions launched a proposed people’s initiative to raise this total to up to CHF10 million, with the excess being used to fund pensions.
Steiner said the “increasingly worrying” list of demands “would at best render the fulfilment of the SNB’s mandate more difficult, and at worst endanger it.” The central bank is charged with helping to control the price of consumer goods whilst keeping the value of the Swiss franc in check.
She also pointed out that future profits are at the mercy of global developments, such as inflation and equity markets. This has been evidenced by an estimated CHF32.8 billion loss for the central bank in the first three months of this year.
Inflation under control
Balancing the twin goals of price and currency stability has driven monetary policy towards maintaining a -0.75% interest rate, said SNB chair Thomas Jordan.
The rate of inflation rose to 2.4% in March, having risen at a gentler momentum of 0.6% during the whole of last year. The Russian invasion of Ukraine has only raised fears of further inflation in energy and food prices. On Friday, Swiss gas company Energie 360° said the conflict has contributed to an 84% rise in gas prices in the last six months.
But Jordan pointed out that inflation is higher in other countries and said that the corresponding strengthening of the franc against a range of currencies had to some extent negated the impact of rising prices. This is because the strong franc gives Switzerland greater purchasing power for imported goods.
“Allowing the appreciation [of the Swiss franc] helped us to keep inflation comparatively low in Switzerland,” he said.
“Inflation is likely to return to the range compatible with price stability in the foreseeable future. Thus far we have seen hardly any indication of a broad spillover of the rise in commodity prices to the prices of other goods and services,” he added.
The SNB expects inflation in Switzerland to average out to 2.1% in the course of this year and to decline again in 2023 and 2024.
Popular Stories
More
Swiss oddities
Mennonite movement turns 500 in Zurich, where it all began
Train vs plane: would you take a direct train between London and Geneva?
Eurostar is planning to run direct trains from Britain to Germany and Switzerland from the early 2030s. Would you favour the train over the plane? If not, why not?
Zurich laboratory finds intestinal bacteria in coffee machines
This content was published on
Last year, the Zurich Cantonal Laboratory found defects in one in four samples of milk drinks from coffee machines. Too many intestinal bacteria were found in a number of samples.
SWISS Belgrade-Zurich flight forced to land in Germany
This content was published on
Swiss flight LX1413 from Belgrade to Zurich had to make an unscheduled landing today in Friedrichshafen, southern Germany.
New Swiss 3D simulation tool offers better landslide forecasting
This content was published on
A new 3D simulation tool is enabling much more accurate avalanche forecasts. The model, which proved its worth during the landslides in Brienz (GR) and Blatten (VS), could lead to more effective management of alpine risks.
Alleged leader of Kosovar terrorist group indicted in Switzerland
This content was published on
The Office of the Attorney General of Switzerland has brought charges against a Kosovar on suspicion of being the leader of the Swiss branch of a Kosovar terrorist organisation. He is also suspected of having been active in the management of the organisation in Kosovo.
Swiss glacier lake drains without causing flooding damage
This content was published on
The Faverges glacial lake on the Plaine Morte above Lenk in the Bernese Oberland drained over the weekend. There was no flooding or damage, the authorities announced on Monday.
Chihuahua leads Swiss rescue team to owner stuck in a crevasse
This content was published on
A Chihuahua helped to rescue a man on the Fee Glacier above Saas-Fee VS on Friday. It alerted a rescue team to its owner who had fallen into a crevasse.
Swiss bosses distance themselves from the United States
This content was published on
According to a survey of managers, Swiss companies are increasingly turning away from the USA and orientating themselves more towards Southeast Asia and the EU. This is the result of a recent survey.
This content was published on
The Fête de l'Epouvantail (scarecrow festival) is celebrating its 30th anniversary and returns to Denens in canton Vaud for its seventh edition from July 10-20.
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.
Read more
More
Geldcast update: the Swiss National Bank denies accusations of sexism
This content was published on
A Swiss National Bank official has rejected allegations of sexism and discrimination in the workplace as “simply incorrect”.
Inflation and interest rates: how Switzerland is different
This content was published on
It will be a while before inflation drops again, according to Nannette Hechler-Fayd’herbe, head of investments at Credit Suisse.
This content was published on
But Switzerland will still have to endure a winter of hardship before the financial markets finally realise that the drivers of the real economy (industry and consumers) are fundamentally secure. The KOF Swiss Economic Institute revised its summer economic predictions downwards on Tuesday. Gross domestic product (GDP) growth this year was downgraded to 2.3 per…
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.