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Swiss Central Bank Maintains Policy Rates

The Swiss National Bank decided to maintain its expansionary monetary policy in order to ensure price stability and underpin economic recovery.

Policymakers of the central bank on Thursday decided to retain the policy rate and interest on sight deposits at the SNB at -0.75 percent.

The bank said it is willing to intervene in the foreign exchange market as necessary, in order to counter upward pressure on the Swiss franc. The bank repeated that the Swiss franc remains highly valued.

Citing higher prices for oil products as well as for goods affected by supply bottlenecks, the bank raised its inflation forecast.

The inflation forecast for 2021 was upgraded to 0.5 from 0.4 percent and that for 2022 to 0.7 percent from 0.6 percent. Inflation is seen at 0.6 percent in 2023, unchanged from prior estimate.

The SNB expects GDP growth of around 3 percent for 2021. In June, the SNB had still been assuming higher growth.

The downward revision is primarily attributable to the development of consumer-related industries such as the trade industry and hospitality, which performed less dynamically than expected.

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