In an interview published on Friday, Swiss National Bank board member Petra Tschudin emphasized that the recent leadership change would not alter the commitment to low inflation. Following Thomas Jordan's departure in September, Martin Schlegel took over as chairman. Tschudin and Antoine Martin both joined the three-member board last year. Tschudin assured that despite changes in leadership, the bank's tasks, instruments, and processes would remain consistent, with a continued focus on maintaining price stability within the target inflation range of 0 to 2%.
Tschudin stressed the importance of price stability, citing it as the central bank's primary objective. She mentioned that the SNB possesses a range of tools, including foreign currency transactions, to achieve its inflation goals. With Swiss inflation dropping to 0.4% in January, the market anticipates further interest rate cuts from the current level of 0.5% during the upcoming meeting scheduled for March 18.
Tschudin addressed the potential for inflation to temporarily exceed the target range, underlining the significance of long-term inflation alignment. Negative interest rates were highlighted as a crucial policy tool previously utilized by the SNB and deemed essential for managing interest rate differentials in a low-rate environment.
Although SNB Chairman Schlegel showed reluctance towards negative rates, Tschudin emphasized their importance for an open economy like Switzerland. Negative rates serve to mitigate excessive Swiss franc appreciation, which can suppress inflation by reducing import costs and negatively impact exporters by increasing their product prices in foreign markets.