SNB left sight deposit rate unchanged at -0.75% as widely expected. “In view of the fact that the Swiss franc is still highly valued, the SNB remains willing to intervene more strongly in the foreign exchange market, while taking the overall exchange rate situation into consideration.”.
On inflation outlook, which is subject to “unusually high uncertainty”, SNB expects inflation to stay negative this year at -0.6%. Inflation is then likely to “edge back to positive” in 2021 at 0.1%, and “increase slightly further” in 2022 at 0.2%.
SNB also noted that GDP is set to shrink by around -5% this year. But domestic economic activity has “picked up significantly since May”. That should be reflected in a “strong rise in GDP” in Q3. The positive development is “likely to continue in 2021. However, recovery will only be “partial for the time being”.
