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Switzerland's approach to monetary policy


  • Giovanni P. Olivei


Monetary policy as conducted by the Swiss National Bank is aimed at maintaining price stability in the medium term. Between 1980 and 1999, the Bank used the seasonally adjusted monetary base as monetary target and as indicator. Given the continually distorted indicator value of the monetary base after 1996, the Bank fundamentally reviewed its modus operandi. As of the beginning of 2000, the Swiss National Bank (SNB) considers price stability to be achieved with an annual inflation (CPI) rate of less than 2 percent. The Bank bases its monetary policy decisions on a medium-term (three-year) inflation forecast. Despite similarities to inflation targeting, the new framework differs from it in one important respect, namely, it does not contain an institutional commitment to an inflation target as the overriding objective of monetary policy.

Suggested Citation

  • Giovanni P. Olivei, 2002. "Switzerland's approach to monetary policy," New England Economic Review, Federal Reserve Bank of Boston, issue Q 2, pages 57-60.
  • Handle: RePEc:fip:fedbne:y:2002:i:q2:p:57-60

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    References listed on IDEAS

    1. Atsushi Miyanoya, 2000. "A Guide to Bank of Japan's Market Operations," Bank of Japan Working Paper Series Financial Markets Departm, Bank of Japan.
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