The Swiss National Bank (SNB) has taken another interest rate break and is leaving the key interest rate at 1.75 percent. SNB boss Thomas Jordan comments in an interview.
Thomas Jordan
National Bank President
Open the people box. Close the people box
Thomas J. Jordan was born in Biel in 1963. He studied economics and business administration at the University of Bern. He was elected President of the SNB Board of Directors by the Federal Council in 2012.
SRF News: You are taking another interest break. Have interest rates peaked?
Thomas Jordan: I can’t say that with absolute certainty. But we have not “threatened” a further interest rate increase. Last time we said we couldn’t rule it out. We didn’t need this communication this time. We do not now see that monetary policy needs to be tightened. We are keeping the interest rate where it is at the moment and we will look at the situation again in three months. We can then assess whether monetary policy is still appropriate or whether it might need to be adjusted.
Monetary policy has meant that no further reference interest rate increases are expected.
There are repercussions from past interest rate increases, for example in rents. What else is in store for consumers in the next few months?
The famous mortgage reference interest rate was recently increased for a second time. That will still have an impact on rents. This will be particularly visible in the consumer price index in the first half of 2024. We also have electricity prices that are being increased. But one can also say: Monetary policy has meant that no further reference interest rate increases are expected. Things were different three months ago, and that is positive news for the tenants too.
Let’s look at the strength of the franc. This helps in the fight against inflation. But it is putting a strain on tourism and the export industry. Will you still allow the franc to continue to strengthen?
We always look at the overall situation, i.e. the interest rate level and the exchange rate together. Yes, we had this appreciation of the franc. This is a difficult situation for many companies, we are aware of that. These companies also have to constantly adapt. But if we have significantly higher inflation abroad, the franc can appreciate without hurting the export economy to the same extent.
But of course: every company is different, every company has to adapt again and again. We have great respect for the flexibility of companies that always manage to adapt accordingly. I wouldn’t say there is an absolute pain threshold. The economy has to be able to live with some change in exchange rates.
The interview was conducted by Jan Baumann.