BADEN, Switzerland (Reuters) – The Swiss National Bank is not hostage to other central banks and decides its own independent monetary policy, SNB Chairman Thomas Jordan said on Wednesday.
“We are not a hostage… we have an autonomous monetary policy with a focus on price stability,” Jordan told an event in Baden.
The SNB took into account international influences, but it was ultimately aiming for optimal monetary conditions for Switzerland, he said.
Other central banks such as the U.S. Federal Reserve and the Bank of England have started to hike rates to combat rising inflation, with the European Central Bank expected to follow.
But the SNB has so far stuck to its ultra-loose policy with the world’s lowest interest rates, Any rate rises would likely heap appreciation pressure back onto the Swiss franc, something the SNB has been keen to avoid.
Although Swiss inflation hit 2.5% in April, its highest level in 14 years and outside the SNB’s price stability target of 0 to 2%, Jordan said he expected it to decline back within the central bank’s target range.
The SNB watched inflation closely and was ready to act if inflation solidified in Switzerland, but there were no signs of a wage-price spiral in Switzerland, he said.
A slide accompanying his presentation said the SNB still needed negative interest rates and the ability to carry out foreign exchange purchases to carry out its monetary policy.
“We remain ready to intervene in currency markets when necessary,” Jordan said, sticking to the mantra of the SNB’s expansive approach.
Swiss National Bank not a hostage to other central banks – Jordan