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SNB Chairman says Swiss inflation does not require rate hikes

The SNB kept its policy rate at 0% and attributed the inflation pickup mainly to petroleum products, expecting the energy effect to fade.

Reported · Written up by our desk · Central Banks

Swiss inflation has accelerated, but Swiss National Bank Chairman Martin Schlegel said the increase does not mean the SNB needs to raise rates like other central banks, according to Action Forex.

Schlegel pointed to unusually hot and dry summer conditions that shifted food prices, but he said the broader inflation rise was almost exclusively tied to petroleum products.

The SNB left its policy rate unchanged at 0%, while its outlook is built on the idea that an energy shock will fade instead of turning into persistent inflation.

He added that the SNB assumes crude oil prices will decline, so the impact of a higher oil price gradually fades over time, and he described the bank’s inflation outlook as comfortable within its 0% to 2% price-stability range.

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