The Swiss National Bank (SNB) Chairman Thomas Jordan recently spoke about the difficulties caused by the strong Swiss Franc for Swiss industry, particularly in the face of weaker demand from European markets. This acknowledgment comes as the SNB continues to navigate maintaining price stability, a crucial factor for economic prosperity.
Key Quotes from Thomas Jordan
“The mandate of the SNB is to maintain price stability—a crucial precondition for society and a good functioning economy.”
“Price stability is a crucial precondition for prosperity.”
“Germany and Europe are the main markets for industry. If the growth is weak there, this automatically affects demand for our industrial goods.”
“The exchange rate … does not make the situation easier. It makes it difficult for the industry.”
Market Reaction
Currently, the USD/CHF pair is down 0.03% on the day at 0.8471.
SNB FAQs
1. The SNB’s mandate is to ensure price stability in the medium and long term by maintaining appropriate monetary conditions.
2. The SNB Governing Board adjusts its policy rate based on inflation levels to achieve price stability.
3. The SNB intervenes in the foreign exchange market to prevent excessive appreciation of the Swiss Franc.
4. The SNB conducts monetary policy assessments quarterly to make decisions and publish inflation forecasts.
Understanding the challenges faced by the Swiss National Bank and the impact of the strong Swiss Franc on industrial demand can provide valuable insights for investors and individuals alike. It highlights the importance of monitoring exchange rates and economic conditions to make informed financial decisions.