The Swiss National Bank (SNB) decided to leave its policy rate unchanged at -0.75 percent at its September meeting, as widely expected.

In its monetary policy assessment, the SNB noted:

• In view of the fact that the Swiss franc is still highly valued, it remains willing to intervene more strongly in the foreign exchange market, while taking overall exchange rate situation into consideration;
• It continues to supply the banking system with generous amounts of liquidity via COVID-19 refinancing facility (CRF); it is also active on the repo market as needed;
• Expansionary monetary policy is necessary to ensure appropriate monetary conditions in Switzerland and to stabilize economic activity and price developments;
• Inflation outlook is subject to unusually high uncertainty. Forecast for the current year remains negative (-0.6%). The inflation rate is likely to edge back into positive territory in 2021 (0.1%) and increase slightly further in 2022 (0.2%);
• Economic activity in Switzerland has picked up significantly since May due to the relaxation of health policy measures and to fiscal and monetary policy support. This should be reflected in strong rise in GDP in Q3, and the positive development is likely to continue in 2021;
• However, it is anticipated that, as abroad, the recovery will only be partial for the time being;
•  Switzerland's GDP is set to shrink by around 5% in 2020, its strongest decline since the crisis in mid-1970s.