Willing to be active on forex market as necessary (Il Sole 24 Ore Radiocor) - Bern, 20 Jun - The Swiss National Bank said it was lowering the policy rate by 0.25 percentage points to 1.25% and said that it is also willing to be active in the foreign exchange market as necessary.

The underlying inflationary pressure has decreased again compared to the previous quarter but it will continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary to ensure inflation remains within the range consistent with price stability over the medium term.

Taking into account today's policy rate cut, the new conditional inflation forecast is similar to that of March.

Over the longer term, it is slightly below the previous forecast.

This reflects somewhat lower second-round effects.

Over the entire forecast horizon, the conditional inflation forecast is within the range of price stability. The forecast puts average annual inflation at 1.3% for 2024, 1.1% for 2025 and 1.0% for 2026. The forecast is based on the assumption that the SNB policy rate is 1.25% over the entire forecast horizon. Without today's rate cut, the forecast would have been lower.

Swiss GDP growth was moderate in the first quarter of 2024.

The services sector continued to expand, while value added in manufacturing stagnated. There was a further slight increase in unemployment. The utilisation of overall production capacity was normal.

Growth is likely to remain moderate in Switzerland in the coming quarters, the SNB said, noting that this year it anticipates gross domestic product of around 1%.

In this environment, unemployment is likely to continue to rise slightly, and the utilisation of production capacity is set to decline slightly.

Over the medium term, economic activity should improve gradually, supported by somewhat stronger demand from abroad.

The SNB currently expects growth of around 1.5% for 2025.

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(RADIOCOR) 20-06-24 09:55:08 (0203) 5 NNNN