SNB keeps policy rate and interest on sight deposits at -0.75% as widely expected. The central bank said “it remains willing to intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration.”
New conditional inflation forecasts for 2021 and 2022 were revised higher. This is “‘primarily due to the rise in oil prices and the weaker Swiss franc”. But, “looking beyond the two-year horizon, the inflation forecast is virtually unchanged compared with December”. The forecasts now stands at 0.2% for 2021, 0.4% for 2022 and 0.5% for 2023.
SNB expects the GDP growth of 2.5-3.0% for 2021. Activity is likely to return to its pre-crisis level in the second half of the year. But production capacity will remain underutilized for some time yet.