SNB Is Becoming Gloomier About Global Growth, Maechler Says

(Bloomberg) --

The Swiss National Bank has become more downbeat about the state of the global economy, Governing Board Andrea Maechler said.

“The big question is, how is global growth affected by the coronavirus,” she said at an event in Zurich on Tuesday. “We will revise the view given at our last monetary policy announcement of a moderate acceleration in global growth.”

Amid mounting concern the disease outbreak is threatening to derail economic momentum, the Federal Reserve slashed interest rates by half a percentage point on Tuesday, the first such emergency move since the 2008 financial crisis.

Officials in the euro area might follow suit next week, which would raise pressure on the SNB to deliver a cut of its own, to maintain the yield spread and keep pressure off the franc.

“At the moment our monetary policy rests on two pillars: negative rates and also our readiness to intervene in foreign exchange markets,” Maechler said. “And we will see what's needed to implement the best monetary policy for Switzerland.”

The SNB's next rate decision is scheduled for March 19, though it has a history of acting on an ad-hoc basis.

“The SNB is never under pressure” to act, Maechler said.
“We have a very clear mandate, which is to maintain price stability, and with this in mind we will make our decision”

To contact the reporter on this story: Jan Dahinten in Zurich at jdahinten@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Catherine Bosley

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