The Swiss National Bank (SNB) today has released its monetary assessment. SNB intends to maintain the expansionary monetary policy and sees a ‘considerable uncertainty as to future developments’ despite the recent positive economics signs.
Thus the bank holds the Libor range at 0-0.75% and aims to effectively keep it at the current 0.25%. SNB will also ‘continue to provide the economy with a generous supply of liquidity and, if necessary, to purchase Swiss franc bonds with a view to reducing risk premia on long-term debt instruments issued by private sector borrowers’. SNB will also continue to ‘act decisively to combat any appreciation of the Swiss franc against the Euro.’
The global economic outlook, according to SNB, will show positive growth rates at the end of the year in the US and Europe. However, it also sees major risks remaining to the the global economic development.
Swiss GDP is now expected to shrink less than predicted in June, now between -1.5% and -2.0% instead of -2.5% and -3%. The return to full capacity utilisation will ‘be slower and is more uncertain overall than is usually the case at the end of a recession.’