SNB’s Jordan Sees No Use in Revising Inflation Objective
(Bloomberg) -- Swiss National Bank President Thomas Jordan said there’s little merit in adjusting his institution’s inflation objective, just days after euro-area officials modified their goal as part of a long-awaited overhaul of policy.
The SNB’s definition of price stability as inflation below 2% over the medium term gives policy makers sufficient flexibility, Jordan said during a conference hosted by Israel’s central bank on Tuesday.
“Changing the target does not seem to be the right solution for Switzerland,” Jordan said. The benefits of a revised approach might not outweigh the costs, including that failure to meet any new objective could undermine the SNB’s credibility, he said.
Jordan said the SNB was committed to its unconventional monetary policy, which consists of negative interest rates plus a pledge to use currency market interventions, if needed.
“Fine tuning is something that is very difficult for small, open economies,” Jordan said.
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