SNB’s Jordan sees high probability of tighter policy

LAUSANNE, Switzerland (Reuters) -There is a high probability that the Swiss National Bank will need to tighten monetary policy further as inflation is likely to remain elevated for a while, SNB Chairman Thomas Jordan said on Monday.

“There is a high probability that the SNB will have to tighten its monetary policy further,” Jordan told business leaders in Lausanne, before reiterating his point for emphasis.

“The next meeting will be in December and there is a high probability that it will be necessary to tighten monetary policy again to make sure that inflation can be fought sufficiently.”

He also said nominal appreciation of the Swiss franc is helping guard against inflationary pressure, reiterating that the SNB was prepared to buy or sell francs to keep the safe-haven currency at an appropriate level to address inflation.

Jordan had said last week the SNB was prepared to take “all measures necessary” to bring inflation back down to its 0-2% target range and that current monetary policy was not restrictive enough to do the job.

The SNB appears to be preparing for further interest rate hikes to combat inflation after already raising rates twice this year to 0.5%.

Swiss inflation eased to 3.0% in October from 3.3% in September although still remained high by Swiss standards.

Jordan said the SNB saw limited second-round wage effects in Switzerland and that the central bank still had credibility in the eyes of the business community that inflation will moderate.

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