SNB keeps policy intact

Source: Dukascopy Bank SA
On December 16, the Swiss National Bank published its Monetary Policy Assessment. In general, the bank kept its policy unchanged. The deposit rate would remain -0.75% and the bank would intervene into forex markets to push the value of the Swiss Franc down.

Quoting the Assessment: "The SNB is maintaining its expansionary monetary policy. It is thus ensuring price stability and supporting the Swiss economy in its recovery from the impact of the coronavirus pandemic. It is keeping the SNB policy rate and interest on sight deposits at the SNB at −0.75%, and remains willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on the Swiss franc. In so doing, it takes the overall currency situation into consideration. The Swiss franc remains highly valued.

The SNB's new conditional inflation forecast for 2021 and 2022 is slightly above that of September. This is primarily due to higher import prices, above all for oil products and for goods affected by global supply bottlenecks. In the longer term, the inflation forecast is virtually unchanged compared with September. The new forecast stands at 0.6% for 2021, 1.0% for 2022, and 0.6% for 2023. The conditional inflation forecast is based on the assumption that the SNB policy rate remains at −0.75% over the entire forecast horizon."

Released Document

Monetary policy assessment of 16 December 2021

The markets did not care for the announcement, as nothing changed and it was expected by most. Namely, the USD/CHF fluctuated in a 13 pip range before returning to the previous level.

On a larger scale, the rate has been finding support in the 0.9200 mark and resistance appears to be provided by 0.9300.

Initial Reaction

Larger scale situation

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Thu, 16 Dec 2021 13:27:32 GMT

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