The Chairman of the Swiss National Bank, Thomas Jordan, recently discussed the impact of the appreciation of the Swiss franc on monetary conditions. He emphasized that the exchange rate plays a crucial role in influencing the inflation outlook and mentioned that they will adjust the policy rate to ensure inflation remains within the range of price stability.
This shift in narrative from Jordan is significant, especially considering his previous statement in May where he highlighted that a weaker franc was the main source of inflation. The fact that he is now addressing the appreciation of the franc indicates a potential change in policy direction, hinting that the central bank may be easing off from recent interventions in the currency market.
The Swiss franc’s strength has been a concern for the Swiss National Bank as it has the potential to impact the country’s export competitiveness and overall economic stability. By addressing the issue of the appreciating franc, Jordan is signaling a willingness to take necessary measures to maintain price stability and ensure that inflation remains in check.
It is important to note that the exchange rate is a crucial factor that central banks around the world closely monitor and intervene in when necessary. The Swiss National Bank’s stance on two-way FX intervention reflects its commitment to maintaining a stable economic environment and addressing any challenges posed by currency fluctuations.
Overall, Jordan’s comments highlight the evolving nature of the Swiss National Bank’s approach to managing the exchange rate and its implications for monetary policy. The central bank’s focus on ensuring price stability in the face of currency appreciation underscores its dedication to supporting the Swiss economy and safeguarding against potential risks.
In conclusion, the discussion on two-way FX intervention by the Swiss National Bank Chairman sheds light on the importance of exchange rate management in maintaining economic stability. Jordan’s remarks provide valuable insights into the central bank’s strategy and its commitment to addressing challenges posed by currency fluctuations. By adjusting policy rates and closely monitoring inflation, the Swiss National Bank aims to navigate the impact of the appreciating franc and uphold price stability in the Swiss economy.