Andrea Michler, a member of the bank’s board of directors, said in an interview published on Monday that the Swiss National Bank will tighten monetary policy if inflation in Switzerland remains high. In April, Switzerland recorded its highest inflation level in 14 years.
The European Central Bank became the last institution on Monday to indicate it was going up interest ratesto fight growth economic inflationafter similar moves by the US Federal Reserve and the Bank England.
The European Central Bank has indicated that it may start raising interest rates in July after it ends its bond-buying programme. According to European Central Bank President Christine Lagarde, interest rates. It may increase by 50 basis points through the end of the third quarter.
Lowest interest rates in the world
The SNB may follow suit if Swiss inflation remains outside the 0-2% target range. In April, inflation in Switzerland It was the highest in 14 years Prices increased by 2.5%.
“Unless the inflation we expect is in the range of 0-2% over the medium term, we will not hesitate to tighten our policies,” Michler told Swiss daily Bilan.
The Swiss National Bank currently has the lowest interest rate in the world at -0.75 percent, which, along with its willingness to intervene in currency markets, has been the basis of monetary policy for the past seven years.
“The SNB’s response to higher inflation will depend on both inflation dynamics and the economic outlook in Switzerland and around the world,” said Michler.
“We’ve always said that once we take on the negative interest rate, we’ll do it. However, we don’t know when we’ll be able to do that,” he said. Maichler declined to answer the question of whether the SNB would follow a potential rate hike by the European Central Bank in July.
“Our goal is to adopt an appropriate monetary policy for the Swiss economy to ensure price stability in the medium term,” she told the newspaper.
Michler said the Swiss National Bank has no purpose Swiss franc exchange rate And that high inflation abroad means that a nominally stronger franc can be tolerated without hurting the economy.
Main image source: MDart10 / shutterstock
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