Martin, Vice Chairman of the Swiss National Bank, said on the 8th that although domestic inflationary pressures are building, there is no need to adjust monetary policy. Speaking at a meeting in Martigny in southwestern Switzerland, Martin explained that the rise in inflation over recent months is mainly due to higher crude oil prices tied to the conflict in the Middle East. After September inflation accelerated to 1.0 percent, the highest level in more than two years, market expectations have grown that the central bank will raise its policy rate in December from the current 0 percent. However, Martin said Swiss inflation remains low and stable compared with many other countries, so there is no need to change the policy stance, adding that because inflation is comfortably within the 0 to 2 percent range used as the guideline for price stability, he believes monetary policy does not need to be changed at this point. He said it is extremely encouraging that no second-round effects, such as a wage-price spiral, are currently visible, and he forecast that inflation will stay near its current level if such signs do not emerge going forward.
SNB Vice Chairman signals no need to adjust policy despite rising inflation, pushing back on December rate-hike expectations, which lowers Swiss yields.
SNB pushback against a December rate hike weakens the franc versus the dollar.
