The recent surge in inflation has been caused by temporary factors, Swiss National Bank Vice Chairman Fritz Zurbruegg said on Wednesday, although central banks must still pay attention and bring price rises under control. "It is the assumption that these drivers are temporary," Zurbruegg told a conference in Zurich, citing supply chain bottlenecks after the pandemic and higher fuel costs as causes for recent higher inflation readings. "It is the achievement of central banks in recent decades to bring inflation under control," Zurbruegg said, adding it was essential that central banks continued to do so.
The Swiss National Bank will take "all necessary measures" to tackle higher prices in Switzerland, SNB Chairman Thomas Jordan said on Thursday, indicating a shift in tone at the central bank that for years has battled to tame the strong Swiss franc. The SNB doubled its inflation forecast for this year, citing higher energy costs, production bottlenecks and the Ukraine war. Unlike the U.S. Federal Reserve and the Bank of England, the SNB held off hiking interest rates, sticking with the world's lowest interest rate of minus 0.75% as expected.
The Swiss National Bank will likely hold fast to the world's lowest interest rate when it gives its latest monetary policy update on Thursday, resisting an upward trend at other global central banks, according to analysts polled by Reuters. All 33 economists polled expected the SNB to keep its policy rate locked at minus 0.75%, with the earliest change from any respondent not expected until September. "Parity is more of a buzzword for analysts and financial commentators than it is for a central bank, which looks more at fundamentals," said GianLuigi Mandruzzato, an economist at EFG Bank.