Against the backdrop of tensions in the Middle East, the Swiss National Bank (SNB) expects a high degree of uncertainty in inflation developments.

Uncertainty regarding the inflation outlook is currently «quite high,» SNB President Martin Schlegel said on Wednesday during a speech at the Peterson Institute for International Economics in Washington, according to a report by the news agency Reuters.

Amid geopolitical tensions, the central bank’s readiness to intervene in the foreign exchange market has increased, as a rapid and excessive appreciation of the Swiss franc—considered a safe-haven currency—could jeopardize price stability. Should inflation rise too strongly, central banks would need to «act early and decisively,» he added.

The SNB left its key interest rate unchanged at zero percent in March and slightly raised its inflation forecast for the current year to 0,5 percent. According to its projections, inflation is expected to remain within the central bank’s target range of zero to two percent through 2028.

The spring meetings of the International Monetary Fund (IMF) are currently taking place in Washington.