The Swiss central bank kept its "expansionary" monetary policy unchanged and lowered its inflation forecast for 2019 and 2020, citing weaker growth and inflation outlooks abroad.
Schweizerische Nationalbank maintained interest rates on sight deposits at negative 0.75% and the target range for the three-month London interbank offered rate at negative 1.25% to negative 0.25%. The central bank said the Swiss franc has depreciated slightly on a trade-weighted basis since its last monetary policy decision in December 2018, but noted that the currency remains "highly valued."
The SNB lowered its inflation forecast to 0.3% in 2019, compared with a previous projection of 0.5%. For 2020, inflation in Switzerland is expected to reach 0.6%, compared with earlier projections of 1.0%, before accelerating to 1.2% in 2021.
Meanwhile, the central bank expects Swiss economic growth to slow to 1.5% in 2019 from 2.5% in 2018. The Swiss economy stagnated in the second half of 2018, but economic indicators currently signal moderately positive momentum, the SNB added.