Economic slowdown in Switzerland cannot be ruled out
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Swiss National Bank (SNB) Chairman Martin Schlegel warned on Friday that an “economic slowdown in Switzerland cannot be ruled out.” Additional quotes Trade policy situation is creating high uncertainty for all countries, including Switzerland. Price stability cannot prevent trade policy related uncertainty, but still very important. Trade policy could fragment global economy. Main instrument is interest rate, but we can also use forex interventions to influence monetary conditions. USD/CHF reaction to SNB Schlegel’s comments As of writing, USD/CHF is holding the rebound above 0.8300, adding 0.45% on the day. SNB FAQs The Swiss National Bank (SNB) is the country’s central bank. As an independent central bank, its mandate is to ensure price stability in the medium and long term. To ensure price stability, the SNB aims to maintain appropriate monetary conditions, which are determined by the interest rate level and exchange rates. For the SNB, price stability means a rise in the Swiss Consumer Price Index (CPI) of less than 2% per year. The Swiss National Bank (SNB) Governing Board decides the appropriate level of its policy rate according to its price stability objective. When inflation is above target or forecasted to be above target in the foreseeable future, the bank will attempt to tame excessive price growth by raising its policy rate. Higher interest rates are generally positive for the Swiss Franc (CHF) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken CHF. Yes. The Swiss National Bank (SNB) has regularly intervened in the foreign exchange market in order to avoid the Swiss Franc (CHF) appreciating too much against other currencies. A strong CHF hurts the competitiveness of the country’s powerful export sector. Between 2011 and 2015, the SNB implemented a peg to the Euro to limit…
Filed under: News - @ April 25, 2025 8:26 am