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The SNB left all its monetary policy measures unchanged. It kept the policy rate and interest on sight deposits at −0.75% and pledged to continue intervening the FX market if necessary. While leaving the growth outlook intact, the central bank upgraded slightly the inflation forecasts.

In the accompanying statement, the SNB described the Swiss franc as “highly overvalued”. It also pledged to “intervene in the foreign exchange market as necessary, while taking the overall currency situation into consideration”. However, the language that it would intervene “more strongly” disappeared. We believe the SNB’s more relaxed attitude was driven by the +1.8% appreciation in EURCHF since the December meeting.

On the economic outlook, the SNB warned that “the coronavirus pandemic is continuing to have a strong adverse effect on the economy”. It retained the view that the country’s economy will expand 2.5%-3% this year, while upgraded the inflation forecasts for 2021 and 2022.

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