You can only tell for sure after the annual financial statements, says Thomas Jordan (59), SNB Director on Radio SRF’s “Saturday Review.” “But it takes almost a miracle to get a positive result.”
Jordan also excludes the possibility of the SNB – as in 2010 – distributing money despite the losses. At the time, the loss came as a surprise, and among other things the money was distributed because the federal government and the cantons had planned it. However, it has been known since spring that a profit distribution cannot be expected this year.
Jordan relies on understanding
In addition, the rules for dividend distribution have now been made more precise, Jordan continued. The understanding that there are situations where the SNB cannot distribute profits has also increased.
Jordan claims currency sales were the main reason for SNB’s negative business result. The SNB has been reducing its foreign exchange reserves for months to strengthen the franc and thereby curb inflation.
But Jordan was cautiously optimistic about the development of inflation. While he can’t rule out further rate hikes following Thursday’s key rate hike.
It will likely take at least until the end of 2023 for inflation to return to the targeted range of zero to two percent. Conditions are not expected for Switzerland, as in some EU countries with inflation of up to 10 percent.
Central Bank underestimated inflation
However, he acknowledged that the SNB also underestimated inflation for a long time last year. The main reason for this is Russia’s “as yet unpredictable” war of aggression against Ukraine in January.
But Jordan also noted that the models used do not predict inflation optimally. “From this we deduce that in addition to model predictions, a common sense judgment is also required.”
Jordan also positions Switzerland better for economic growth than many other countries. For example, SNB expects lower economic growth in 2023 compared to this year, but does not expect a recession in Germany as Bundesbank predicts for 2023. (SDA)