SNB must provide information on exchange rate policy to gain confidence – Commerzbank

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Swiss National Bank (SNB) is likely to join the club of 50 bps hikes. Economists at Commerzbank will be closet watching the press conference to find new information about the exchange rate policy.

“The SNB is expected to raise its key interest rate by 50 bps to 1%. At least that’s what almost all analysts believe. So it makes sense to assume that as well. I can’t imagine that the Swiss monetary watchdogs want to surprise the market too much.”

“There is the question of the future interest rate path. The insights gained in this area are likely to be meager. I think the need for information on exchange rate policy is more justified.”

“The only thing we would like to know is how the SNB defines ‘weakening’. Only if this is clearly understood by the market can it judge the credibility of the SNB’s policy. If everyone has to guess what exchange rate policy the SNB has promised us, there can be no confidence in this policy. And then, I fear, it will not be very effective.”

See – SNB Preview: Forecasts from five major banks, new tightening to come

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