The SNB announces its 13 June monetary policy decision

  • Prior -0.75%
  • 3-month Libor lower target range -1.25%
  • 3-month Libor upper target range -0.25%
  • Franc remains highly valued
  • Will remain active in foreign exchange market as necessary
  • Introduces SNB policy rate that replaces target range for 3-month Libor
  • That rate stands at -0.75%
  • From now on, SNB will use this rate in communicating monetary policy decisions
  • Monetary policy remains as expansionary as before
  • Foreign exchange market continues to be fragile
  • SNB sees 2019 GDP growth forecast at around 1.5% (unchanged)
  • SNB sees 2019 CPI at 0.6% (previously 0.3%)
  • SNB sees 2020 CPI at 0.7% (previously 0.6%)
  • SNB sees 2021 CPI at 1.1% (previously 1.2%)

There isn't much takeaway from the central bank statement as the major details remain the same i.e. franc assessment and inflation outlook.

However, the SNB notes that risks this time around are more pronounced than their previous monetary policy assessment and they say that inflationary pressures are likely to remain moderate, with the risks to the baseline scenario still tilted to the downside.

The only notable change is that moving forward, there will be a new reference rate introduced to replace the current sight deposit interest rate, which is affected by the 3-month Libor target range. That rate holds similar to the current sight deposit rate at -0.75%.