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Interest on sight deposits at the Swiss National Bank remains at 0.75% below zero, policymakers said on Thursday. They also decided to leave the target range for the three-month Libor (London Interbank Offered Rate) unchanged at between 1.25% and 0.25% under the neutral level. The central bank reiterated it will "remain active in the foreign exchange market as necessary," willing to intervene to ease upward pressure on the franc.
The inflation outlook was slightly dampened. After 0.3% this year, the main gauge is expected in 2018 at 0.3% or 0.1 percentage points less than what was estimated in March. The rate-setters took the forecasted rate also 0.1 points lower for the year after that, to 1%. Growth in 2017 is still expected to reach 1.5%.
"In the first quarter, growth in mortgage lending remained constant at a relatively low level, and momentum in residential real estate prices continued at a measured pace. At the same time, owing to developments in fundamentals and the generally subdued activity on the mortgage and residential real estate markets, imbalances have fallen slightly in recent quarters. Nevertheless, they are still just as pronounced as they were in 2014, when the sectoral countercyclical capital buffer was set at 2%," the statement said.
