Swiss National Bank chief stresses tackling inflation as main goal

ZURICH (Reuters) – The Swiss National Bank will continue to target low inflation as the touchstone of its monetary policy, Chairman Martin Schlegel said on Friday, underlining continuity with predecessor Thomas Jordan who stepped down in September.

Schlegel stressed keeping inflation within a range of 0-2% – which the central bank calls price stability – as a key factor for the Swiss economy’s strong performance in recent years.

After a post-pandemic spike, inflation has returned to the target range over the last 17 months, and fell to its lowest level in more than three years in October.

The downward trend has stoked market expectations of more interest rate cuts by the SNB this year and into 2025 to head off deflationary risks.

“The Swiss economy has performed well by international comparison,” Schlegel told an event in Zurich.

“The SNB has contributed to this performance by maintaining price stability despite significant deflationary and inflationary risks,” he said. “Going forward, the SNB will continue to contribute to favourable economic conditions in Switzerland by ensuring price stability.”

The comments echo Jordan’s consistent messaging on inflation during his 12-year stint in charge.

Schlegel, who began his career at the SNB in 2003 and worked as a researcher for Jordan, was widely seen as the bank’s continuity candidate.

He said the SNB needed a flexible inflation target due to Switzerland being strongly affected by global economic trends. He also noted it has a safe-haven currency, which tended to appreciate during downturns.

Schlegel said the SNB’s main tools were its policy interest rate, as well as currency market interventions.

The SNB’s target range allowed the central bank to respond flexibly to shocks and decide how to act, Schlegel said.