“Growth is likely to be lower than expected just a few weeks ago,” Schlegel said on Friday.
“The current trade policy situation is creating great uncertainty for all countries affected, including Switzerland,” said Schlegel, according to the text of his speech at the SNB general meeting in Bern.
The uncertainty concerns both the economic outlook and the longer-term effects, such as a possible fragmentation of the global economy, he said. “As a small, open economy, Switzerland is feeling the effects of protectionism particularly keenly.”
According to Schlegel, the impact on the Swiss economy and inflation can only be roughly estimated. It is still very uncertain how inflation and the economy will develop in Switzerland.
The SNB is therefore monitoring the situation and further developments closely and will take them into account in its analyses and forecasts, he said. “If necessary, we will adjust our monetary policy to ensure price stability in the future.”
Maintaining price stability is the main task of the Swiss National Bank. The SNB key interest rate is the main instrument for this, and interventions on the foreign exchange market are also possible if necessary, Schlegel emphasised. “Price stability is the central contribution that the SNB can make to Switzerland’s stability. This also applies in the current environment.”
However, observers assume that the SNB will refrain from intervening in the foreign exchange market whenever possible, even though the Swiss franc has recently benefited massively from its status as a safe haven and has gained several centimes against the dollar within a short space of time.
Otherwise, Switzerland runs the risk of being pilloried by the Trump administration as a currency manipulator. And this could complicate Switzerland’s current negotiations with the US government for favourable customs conditions.
Translated from German by DeepL/ts
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