By John Revill
ZURICH (Reuters) – Swiss National Bank Chairman Thomas Jordan repeated his commitment to fight “stubborn” inflation on Thursday in his final public appearance before the central bank announces its next interest rate decision.
Swiss annual inflation dipped to 2.2% in May, government data showed on Monday, but has remained above the 0-2% range targeted by the SNB since February 2022.
“It is really important to get inflation down to the level of price stability,” Jordan told the Swiss Economic Forum, which took place in Interlaken.
“Inflation remains very stubborn,” he said. “It is very important we stabilise it under 2%. We cannot rule out having to tighten monetary policy again,” he added in a later interview with Swiss broadcaster SRF.
The central bank was prepared to use currency exchange rates and interest rates to reach its 0-2% target range, which it describes as price stability.
Although Swiss inflation remained modest in international comparisons, it did not make sense for the SNB to let inflation climb and then hike rates, Jordan said.
Despite a recent easing in price rises in Switzerland, the SNB is still expected by analysts and the market to raise interest rates at its meeting on June 22.
Inflation could also rise again quickly, Jordan added, which would create difficulties for companies as well as households with relatively low incomes.
Prices could also rise again later this year as a result of increases in rental prices in Switzerland.
Jordan’s comments echo Vice Chairman Martin Schlegel who last week said the SNB was still prepared to hike rates from the current level of 1.5% as it saw a broadening in inflationary pressure.
The SNB also needs to get inflation below 2% as soon as possible to prevent inflationary perceptions becoming entrenched, Jordan saidlast week.
(Reporting by John Revill; Editing by Tomasz Janowski and Sharon Singleton)
