The Swiss National Bank (SNB) is leaving the key interest rate at -0.75 percent, as it wrote in a statement on Thursday. With this, it is primarily taking into account the currency situation – the franc remains highly valued despite the recent bout of weakness, as the currency guardians emphasized.

Nevertheless, the rise in the price of the euro and the dollar has led to an increase, albeit slight, in inflation. The SNB expects inflation to reach 0.2 percent in the current year, 0.3 percent in 2022, and 0.5 percent in 2024, which is still well below the maximum value of 2 percent for price stability.

Great Uncertainty

In addition to the weaker franc, which is fuelling the prices of imported goods, the price of crude oil has also risen recently, which is translating into more inflation.

All in all, the SNB is sticking to its assessment of the overall economic situation, which is, however, subject to a relatively large degree of unpredictability given the uncertainties of the pandemic. The central bank continues to expect GDP growth of 2.5 to 3 percent in 2021.