LUCERNE, Switzerland (Reuters) – The Swiss National Bank is ready to take further steps to fight inflation despite relatively modest price increases compared with international peers, SNB Chairman Thomas Jordan said on Friday.
Inflation in Switzerland hit 3.5% in August, the highest level in nearly 30 years, although well below 9.1% in the Eurozone, UK and UK The 9.9% level US interest rate is 8.3%.
The Swiss National Bank responded on Thursday by raising its policy rate to 0.5%, ending a nearly eight-year era of negative interest rates.
“Inflation in Switzerland is lower than abroad. In this country, however, inflation is still much higher than widely expected,” Jordan said in remarks prepared for an event in Lucerne Say.
” at 3.5%, the highest level since s. It is well above the SNB’s equivalent of price stability, which is between 0% and 2% in the medium term .”
The central bank may raise interest rates again to fight inflation and ensure price stability, which Jordan sees as a priority for the SNB.
“Ensuring price stability is a challenge that requires the full attention of the SNB,” Jordan said.
“The need for the SNB to further increase policy rates to ensure
price stability in the medium term cannot be ruled out,” he added, repeating his message from Thursday.
Economists expect the SNB to raise interest rates again in December and March 2023.
The central bank will also actively participate in the foreign exchange market if necessary, Jordan said.
The Swiss National Bank says it will prevent a sharp depreciation of the Swiss franc – the strength of the Swiss franc mitigates the impact of imported inflation.
Last year the SNB did not fight against the appreciation of the safe-haven currency, which appreciated by 4% between autumn and spring 2002, making imported goods cheaper.
Jordan said further action may be needed as there are growing signs that inflation is spreading to goods and services hitherto unaffected by the Ukrainian war or pandemic bottlenecks.