ZURICH, Feb 20 (Reuters) – The Swiss National Bank is “still willing” to be active on the foreign currency markets in pursuing its goal of price stability, Vice Chairman Martin Schlegel said on Monday.
“If the Swiss franc depreciates we are ready to sell foreign exchange, if the Swiss franc appreciates strongly we are willing to buy foreign exchange,” Schlegel told an event in Warsaw.
The SNB had to react and “react forcefully” to tackle Swiss inflation, which peaked at 3.5% last year, Schlegel said.
Although this level was quite low by international comparisons, it was still above the 0-2% range that the SNB defines as price stability, he said.
“The most important contribution we can do for society is to have stability-orientated policy and maintain price stability.”
The high value of the Swiss franc had helped dampen inflation driven by more expensive imports, Schlegel said, while Switzerland’s use of hydroelectric and nuclear power helped reduce the effect of soaring energy prices.
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Swiss prices rose by 3.3% in January, representing a year that inflation has remained above the SNB’s target range, data showed last week.
Markets expect the SNB to raise its rates again from the current level of 1% at its next meeting on March 23, with a probability of 85% for a 50-basis point increase.
Reporting by John Revill; Editing by Mark Heinrich and Alex Richardson
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