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Home / SNB News / 2024-04-18 – Antoine Martin / Thomas Moser: The implementation and transmission of the SNB’s monetary policy during the recent tightening cycle

2024-04-18 – Antoine Martin / Thomas Moser: The implementation and transmission of the SNB’s monetary policy during the recent tightening cycle

Summary:
Since peaking at 3.5% in August 2022, inflation in Switzerland has fallen sharply and stood at 1.0% in March 2024. This speech discusses how the implementation and transmission of the Swiss National Bank's monetary policy contributed to this substantial decline in inflation. By implementing its policy rate effectively in the secured short-term Swiss franc money market and by ensuring broad transmission to all relevant financial market interest rates and Swiss franc exchange rates, the SNB was able to rapidly dampen inflation in Switzerland. As a complement to its interest rate policy, the SNB sold foreign exchange to counter inflationary pressures from abroad. While interest rate policy is the SNB's main lever for influencing monetary conditions, in a small open economy

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Since peaking at 3.5% in August 2022, inflation in Switzerland has fallen sharply and stood at 1.0% in March 2024. This speech discusses how the implementation and transmission of the Swiss National Bank's monetary policy contributed to this substantial decline in inflation. By implementing its policy rate effectively in the secured short-term Swiss franc money market and by ensuring broad transmission to all relevant financial market interest rates and Swiss franc exchange rates, the SNB was able to rapidly dampen inflation in Switzerland. As a complement to its interest rate policy, the SNB sold foreign exchange to counter inflationary pressures from abroad. While interest rate policy is the SNB's main lever for influencing monetary conditions, in a small open economy such as Switzerland, FX intervention has proved to be an effective additional instrument for creating monetary conditions that ensure price stability.

Swiss National Bank
The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.

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