Switzerland’s central bank responded to the growing threat of inflation by moving the headline rate to 0.5%. This applies from September 23, 2022.
“In doing so, it is countering the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected,” the SNB said in a press statementExternal link on Thursday.
The central bank now expects inflation to reach 3% this year (up from a 2.8% prediction in June) and 2.4% in 2023 (1.9% June forecast).
SNB chair Thomas Jordan said the central bank will steer a path between controlling both consumer prices and the strength of the franc relative to other currencies.
“It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term,” he said. “To provide appropriate monetary conditions, we are also willing to be active in the foreign exchange market as necessary.”
“There is a likelihood that monetary policy will be further tightened,” Jordan told reporters.
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