The chairman of the Swiss National Bank emphasizes the utmost significance of addressing inflationary concerns
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Loading... - louis hannah
- 09 Jun 2023
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The chairman of the Swiss National Bank, Thomas Jordan, reiterated his commitment to combatting persistent inflation during his final public appearance before the central bank announces its upcoming interest rate decision. According to government data released on Monday, Switzerland's annual inflation rate dropped to 2.2% in May but has remained above the SNB's target range of 0-2% since February 2022.
Speaking at the Swiss Economic Forum held in Interlaken, Jordan emphasized the significance of reducing inflation to achieve price stability. He stated, "Inflation remains remarkably persistent, and it is crucial that we stabilize it below 2%. We cannot exclude the possibility of tightening monetary policy once again," he added in a subsequent interview with Swiss broadcaster SRF.
The central bank is prepared to utilize currency exchange rates and interest rates to reach its target range of 0-2%, which is defined as maintaining price stability. Despite Switzerland's relatively modest inflation rate compared to international standards, Jordan emphasized that it would not be prudent for the SNB to allow inflation to rise unchecked before considering rate hikes.
Despite recent indications of a slowdown in price increases within Switzerland, analysts and the market still anticipate an interest rate hike at the SNB's upcoming meeting on June 22. Jordan also highlighted the potential for a rapid resurgence in inflation, which would pose challenges for both companies and households with lower incomes. Additionally, rental price hikes in Switzerland could contribute to rising prices later this year.
Jordan's statements align with those made by Vice Chairman Martin Schlegel, who affirmed last week that the SNB remains prepared to raise interest rates from their current level of 1.5% due to the broadening pressure of inflation.
