SNB President Thomas Jordan urges caution: “Our expectation is that inflation will rise again.”

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According to the President of the Swiss National Bank (SNB), the fight against inflation has not yet been won. On Monday evening, Thomas Jordan (61) said that the situation had improved significantly, but negative surprises could not be ruled out.

Second-round effects could be greater or energy could become expensive again, according to Switzerland’s top monetary authority. “So you have to be careful to a certain degree,” Jordan said on German-speaking Swiss television SRF’s “Eco Talk” program.

Jordan expects inflation to rise again in the short term due to the VAT increase as well as rising rent and electricity prices. “However, it should not exceed 2 percent,” he said. As it is known, the SNB believes that price stability is guaranteed up to 2 percent inflation. Jordan emphasized that, in general, inflation pressure has now decreased.

Call to change bank

He also commented on the interest rates offered by Swiss banks, which are often below the current basic interest rate. According to Jordan, the prerequisite for effective competition between banks is the reaction of dissatisfied bank customers. “If you are unhappy with the interest rate, you should see if there is a better interest rate elsewhere.” However, each customer must evaluate this for himself. It’s not the first time Jordan has encouraged bank customers to switch. It is hoped that if customers turn to banks with the best interest rates, the entire industry will be forced to offer better conditions.

Jordan sympathized with the industry’s concerns about the strong franc. “And I have great respect for the fact that he always manages to stay competitive.” However, it is necessary to see that the current problems in the sector are not only caused by the exchange rate. On the contrary, they are also a consequence of the weak international economy, especially in Europe and Germany.

The SNB boss has little understanding of the demands for distribution to the federal government and the cantons, despite the central bank’s current financial situation. The SNB is responsible for ensuring price stability. “Payments are a byproduct.” If you change that prioritization, Jordan says, you will greatly compromise the quality of monetary policy. (SDA/sfa)

Source :Blick