Money in Switzerland
Switzerland - Money
SNB stands pat in September on stronger franc; downgrades 2019 inflation outlook
The Swiss National Bank (SNB) maintained the target rate for the three-month Libor at between minus 1.25% and 0.25% at its 21 September meeting. In addition, the interest rate on sights deposits was left unchanged at minus 0.75% and the Bank reaffirmed its commitment to intervening in the forex markets to buffer against further appreciation of the Swiss franc. The decision was widely in line with market expectations. The three-month Libor has been left at its current range since January 2015.
The Bank’s decision was predominately determined by developments in the foreign exchange markets, with the Bank describing the situation as “fragile”. The franc has appreciated significantly against the euro since the last monetary policy meeting on 21 June amid escalating trade tensions between the U.S. and China and political uncertainty in some countries, which have made investments denominated in Swiss francs more attractive. The SNB considers the currency to be “highly valued” in spite of the current expansionary monetary stance. Furthermore, the Bank noted that the inflation outlook for 2018 was unchanged from June’s forecast of average inflation of 0.9%, while the 2019 forecast was cut to 0.8% average inflation (June’s inflation forecast: 0.9%).
Since monetary policy normalization would cause the franc to appreciate further, which would weigh on export-oriented sectors and thus, economic growth, it is likely the Bank will continue to leave the interest rates steady at low levels for the foreseeable future.
The next monetary policy meeting is scheduled for 13 December.
Switzerland Interest Rate Forecast
Met the why particular Consensus Forecast panelists expect the midpoint of the three-month Libor target range to end 2018 at minus 0.75% and 2019 at minus 0.42%.
Switzerland - Money Data
|Money (annual variation in %)||3.1||2.6||1.4||3.9||4.1|
5 years of economic forecasts for more than 30 economic indicators.
Switzerland Money Chart
Source: Swiss National Bank and Met the why particular calculations.
|Bond Yield||-0.03||6.27 %||Nov 15|
|Exchange Rate||1.01||-0.54 %||Nov 15|
|Stock Market||8,870||-0.82 %||Nov 15|
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November 2, 2018
On a month-on-month calendar- and seasonally-adjusted basis, real retail sales fell 1.6% in September, down from the flat print in August.
November 1, 2018
Consumer prices rose 0.2% over the previous month in October, up from the 0.1% increase in September.
November 1, 2018
Consumer sentiment among Swiss households was relatively unchanged in the August-October period, with the index prepared by the State Secretariat for Economic Affairs (SECO) inching up from minus 7 points in May-to-July to minus 6 points.
November 1, 2018
The manufacturing Purchasing Managers’ Index (PMI) produced by Credit Suisse and procure.ch fell to an over one-year low of 57.4 points in October from 59.7 points in September.
October 30, 2018
The KOF economic barometer—a leading composite indicator for the Swiss economy forecasting a six-month period—dipped to 110.1 points in October from a revised 112.3 points in September (previously reported: 112.2 points).