Watson believes the central bank took the approach of stimulating the economy, but “maybe they didn’t give it as much thought as they could have”.
While it has been painful for exporters, the strong franc has also made imports cheaper. Inflation for 2015 is forecast at –1.1 percent. Domestic demand looks set to remain robust, according to the bank, which expects growth of approximately 1.5 percent this year. For 2015, the SNB anticipates growth of just under 1 percent in Switzerland. Unemployment stood at 4.9 percent in the third quarter of 2015, according to the ILO, still well below the 6.3 percent recorded in November in neighbor Germany.
The central bank has also indicated that it is prepared to take measures to curb the strength of the franc. The currency, which has weakened in recent months to trade at about 1.09 euros, is still “considerably” overvalued according to the SNB. Vice chairman Fritz Zurbrügg said in speech earlier this week “business as usual is still a long way off”.
He added that under certain conditions, the SNB was still prepared to intervene directly in the foreign exchange market. “This applies especially in the prevailing environment,” he said.