Despite rising inflation and the Swiss franc reaching its highest valuation in six-and-a-half years, the Swiss National Bank is maintaining its ultra-loose monetary policy, the central bank stated on Thursday.
The SNB left its policy rate at -0.75% and pledged to conduct currency interventions to stem the growth of the safe-haven currency.
The central bank also kept the phrase "highly valued" in its description of the franc, which it has used since September 2017. The franc has appreciated 10% against the euro since then, reaching its highest level since July 2015.
"The SNB's expansionary monetary policy remains unchanged," the SNB said. "As a result, price stability is ensured, and the Swiss economy is supported in its recovery from the coronavirus pandemic."
According to an analysis of sight deposits, which are a proxy for its foreign currency purchases, the SNB appears to have resumed its foreign currency interventions after being on the sidelines for weeks.
The SNB revised its economic projections, predicting that Swiss GDP will increase by roughly 3.5% in 2021, up from its earlier estimate of around 3% in September. It predicted growth of roughly 3% in its first forecast for 2022.
Inflation is predicted to hit 0.6% in 2021, up from the SNB's September forecast of 0.5%. Inflation in Switzerland is predicted to be 1% in 2022 and 0.6% in 2023, compared to prior projections of 0.7% and 0.6%, respectively.