The leadership transition at the Swiss National Bank (SNB) does not affect its dedication to maintaining low inflation, governing board member Petra Tschudin said in an interview published on Friday.
Thomas Jordan stepped down last September after serving 12 years as chairman, with Martin Schlegel taking over the role. Tschudin and Antoine Martin joined the three-member board, responsible for setting interest rates, last year.
“The tasks, instruments and processes remain the same,” Tschudin told Swiss newspaper Neue Zuercher Zeitung.
Ensuring price stability, defined by the SNB as annual inflation between 0% and 2%, remains the central bank's top priority, Tschudin said.
She added that the SNB has a “toolbox” of instruments to achieve this goal, including foreign currency purchases and sales.
Markets anticipate the SNB will proceed with interest rate cuts from the current 0.5% level at its meeting on 18th March, following Swiss inflation dropping to 0.4% in January, its lowest since April 2021, Reuters reports.
In the interview, conducted before the latest data was released on Thursday, Tschudin stated that inflation temporarily exceeding the 0-2% range was not a concern.
“The important thing is that inflation is where we want it to be in the medium term,” she stated.
In addition, Tschudin said negative interest rates, a policy the SNB used from December 2014 to September 2022, were also a key tool in their strategy.
Last month, SNB Chairman Schlegel stated he would consider reintroducing negative rates, though he emphasised this was a route he would prefer to avoid.
“For us as a small, open economy, the negative interest rate instrument is important,” Tschudin added.
“It allows us to manage the interest rate differential even in a low interest rate environment.”
Negative rates could help prevent an excessive rise in the Swiss Franc, which would lower inflation by making imports cheaper, while also potentially harming exporters by making their goods more expensive in foreign markets.