SNB’s Jordan Says Inflation Risk Is Moderate, SamW Reports

The Swiss National Bank’s monetary policy is appropriate given there’s no great risk of spiraling inflation, its President Thomas Jordan said in an interview with Schweiz am Wochenende.

“We think the risk of inflation is moderate in Switzerland,” he told the newspaper in an interview published on Saturday. “The strong currency acts as a damper on inflation, the franc is still highly valued.”

The SNB is using a deposit rate of -0.75% coupled with a pledge to conduct foreign exchange interventions to keep the franc in check and stave off deflationary pressures.

The Swiss economy slumped the most in decades last year, though data suggest momentum is now building. Switzerland’s KOF economic barometer suggests prospects are “very positive,” so long as the virus can be tamed.

Even the improved growth outlook doesn’t warrant a change to policy, Jordan said.

“In the current environment, the franc would rise significantly without negative rates, that would hurt our economy,” he said.

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