SNB Chairman Thomas Jordan, stated that the current monetary policy is too loose to bring inflation back to price stability in the medium term, and further tightening cannot be ruled out. The comment came after recent data showed that consumer inflation reaccelerated to 3.4% in February, staying well above SNB’s 0-2% target.
“The SNB’s monetary policy is still too loose to return inflation back to price stability in the medium term,” Jordan yesterday at Zurich University. “We cannot exclude that we have to tighten further.”
“The SNB has to act to reach price stability in the medium term again,” he said. “The barren Swiss labor market can lead to second- and third-round effects happening more easily.”
Meanwhile Jordan also pointed out that the central bank has more than one option, as “we can raise rates, but also sell foreign currency — and we have sold foreign currency in the past.”
SNB will meet on March 23 to decide on monetary policy.
