The Swiss National Bank (SNB) has cut its growth forecast for the country’s economy, anticipating a bigger drop in consumer prices as well, and is holding firm on its cap on the franc’s growth against the euro.
Reuters reported Thursday that at its quarterly meeting the central bank revised its forecast for the Swiss economy downward from 1.5% for the year to only 1%, and said that it now expected consumer prices to fall 0.6%. It also declared again its intention not to allow the franc to rise beyond an exchange rate of 1.20 against the euro, saying that it would take additional steps to preserve that rate if it had to.
The SNB cited the effect such an increase would have on prices and growth as reasons for its determination. In its statement, it said in part, “Downside risks to the Swiss economy will also stay high in the near term.”