Matthew Lloyd | Getty Images
Thomas Jordan, president of the Swiss National Bank (SNB), pauses during the Swiss International Finance Forum in Bern, Switzerland.
“Our monetary policy is expansionary and it has to remain expansionary because we still have a very difficult situation: We have negative inflation, we have a negative output gap and the Swiss franc remains significantly overvalued,” he added.
Meanwhile, on Wednesday the U.S. Federal Reserve decided to raise interest rates by 25 basis points — the second time it had done so in a decade. While the market had already priced this in, investors weren’t expecting three planned hikes for 2017. However, for the SNB’s chairman, the Fed’s recent moves highlight that the U.S. economy is on track.
“It’s very positive that the U.S. economy is on track. The decision by the Fed shows that the situation is improving and this is a very positive sign, not only for Switzerland but for the world economy as a whole.”
2016 has been a political and economic whirlwind for markets, businesses and countries worldwide, and political risk both inside and out of Europe is expected to linger in the coming year. Following the Brexit vote, the central bank confirmed that it had intervened in the currency market, after the Swiss franc came under upward pressure, Reuters reported.