The Swiss National Bank is not condemned to cut interest rates further in December, Vice President Antoine Martin said in an interview published Monday, despite previous comments that it could reduce borrowing costs after s be attacked by inflation.
The SNB has been at the forefront of central banks cutting interest rates this year, with three cuts already and markets expecting a reduction of at least 25 basis points from the current level of 1% when of its next meeting on December 12.
At its last meeting in September, the SNB declared itself ready to make a further reduction, while Mr Martin and his chairman Mr Schlegel recently floated the idea of lowering interest rates further. , or even bring them below zero.
The cuts are possible after Swiss inflation was brought under control, with a rate of just 0.6% in October, the lowest level in more than three years.
But nothing is set in stone, Mr. Martin told the Swiss newspaper Le Temps.
“It is not helpful for central banks to lock themselves into forward-looking communications, because between now and the next decision there may be changes in conditions that render current communications invalid,” Mr. Martin.
This means that the SNB has made “absolutely no commitments” about its future course of action, Mr Martin said in the interview, which took place before the election of Donald Trump as US president. .
“It will all depend on the conditions when we assess the situation in December,” Mr Martin said.
Low Swiss inflation has been one of the factors behind the Swiss franc’s rise in recent years, while the currency has also been sought by investors as a safe haven in times of uncertainty, he said. he added.
“Due to the inflation differential between Switzerland and other countries, we expect the Swiss franc to appreciate structurally over time in nominal terms,” he said.
“But in real terms, if you exclude the effect of inflation, the appreciation has been limited,” Mr Martin said, adding that the franc’s appreciation this year was not particularly surprising or problematic. .
