SNB President Jordan wants to remain cautious about inflation
Published: Monday, Jan 29th 2024, 22:40
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According to the President of the Swiss National Bank (SNB), the battle against inflation has not yet been won. The situation has improved significantly, but negative surprises cannot be ruled out, said Thomas Jordan on Monday evening.
According to Switzerland's top monetary watchdog, there could be more second-round effects or energy could become more expensive again. "That's why you have to exercise a certain amount of caution," said Jordan in the "Eco Talk" program on Swiss-German television channel SRF.
In the short term, Jordan expects inflation to rise again due to the VAT increase and higher rents and electricity prices. "But it should not rise above 2 percent," he said. As is well known, the SNB considers price stability to be guaranteed up to an inflation rate of 2 percent. Overall, however, inflationary pressure is currently receding, emphasized Jordan.
He also commented again on the interest rates offered by Swiss banks, most of which are below the current prime rate. According to Jordan, the prerequisite for functioning competition between banks is that dissatisfied bank customers react. "If they are unhappy with the interest rate, they have to see if there is a better one elsewhere." However, each customer must judge this for themselves.
Jordan showed understanding for the industry's concerns about the strong franc. "And I have great respect for the fact that it always manages to remain competitive." However, it must also be recognized that the industry's current difficulties are not just a consequence of the exchange rate. Rather, they are also a consequence of the weak international economy - particularly in Europe and Germany.
The head of the SNB has little sympathy for the demands for distributions to the Confederation and the cantons despite the central bank's current financial situation. The SNB has a mandate to ensure price stability. "Distributions are a by-product." Changing this prioritization would massively endanger the quality of monetary policy, said Jordan.
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