Swiss National Bank leaves rates on hold
By Michele Maatouk
Date: Thursday 14 Dec 2023
(Sharecast News) - The Swiss National Bank kept its policy rate unchanged at 1.75% on Thursday, in line with expectations.
The Bank said that while inflationary pressure has eased slightly over the past quarter, uncertainty remains high.
"The SNB will therefore continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term," it said.
The Bank cut its inflation forecast for 2024 to 1.9% from 2.2% and for 2025 to 1.6% from 1.9%.
The SNB also said that the growth outlook for the global economy in the coming quarters remains subdued.
"Inflationary pressure is likely to continue to ease. This scenario for the global economy is still subject to large risks," it said.
"Inflation could remain elevated for longer in some countries, necessitating a further tightening of monetary policy there. Equally, the energy situation in Europe could deteriorate over the course of the winter, and geopolitical tensions could increase.
"It therefore cannot be ruled out that global growth momentum will weaken more significantly than assume."
Adrian Prettejohn, Europe economist at Capital Economics, said the monetary policy statement was dovish as policymakers placed less emphasis on selling FX assets and reduced their inflation forecast for 2024.
"This supports our view that the SNB will cut rates at the next meeting in March, and we have pencilled in a total of 75bp of cuts for 2024," it said.
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