"The story in my view is that prices for imported goods are still falling, despite the Swiss National Bank's defense of the 1.20 floor"
- David Marmet, economist at Zuercher Kantonalbank
Consumer prices in Switzerland were weaker than previously was expected in March, underlining the Swiss National Bank's view that it needs to maintain the cap it has imposed on the strong Franc. Inflation dropped 0.6% from a year ago and rose 0.2% from the previous month, the Federal Statistics Office said. Analysts, however, expected prices to fall 0.5% year-on-year and rise 0.3% on a monthly basis. In order to prevent deflation and a recession, the SNB capped the Franc at 1.20 per euro in 2011 as investors looking for a safe haven, pushing the currency to record highs, pressuring import prices.
"The story in my view is that prices for imported goods are still falling, despite the Swiss National Bank's defense of the 1.20 floor," said David Marmet, economist at Zuercher Kantonalbank. "This helps the SNB maintain its monetary policy, and I see no signs of it changing. We believe the SNB will maintain the cap well into 2014."
In a separate report, the State Secretariat for Economic Affairs said that Swiss unemployment rate remained unchanged at a seasonally adjusted 3.1% last month, from 3.1% in the preceding month, in line with analysts' forecasts.
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