Jean-Pierre Roth: The position of the Swiss franc exchange rate in the
Swiss National Bank monetary policy strategy
Summary of a speech by Mr Jean-Pierre Roth, Chairman of the Governing Board of the
Swiss National Bank and Chairman of the Board of Directors of the Bank for International
Settlements, at the University of St. Gallen, St. Gallen, 19 December 2007.
The complete speech can be found in German on the Swiss National Bank's website (www.snb.ch).
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The exchange rate is an important factor in determining the domestic price level in
Switzerland. Nevertheless, it is not a monetary policy goal for the Swiss National Bank and is
only relevant insofar as it has an impact on future inflation. Our concerns about our
currency's weakness should not be read as a hidden form of exchange rate policy but rather
as genuine concern about future price stability. A sustained tendency to weakness on the
part of the Swiss franc could trigger inflationary effects that - sooner or later - would have to
be countered with monetary policy instruments taking the form of interest rate measures. In
the medium-term, this could lead to a reduction in the interest spread between the Swiss
franc and the euro.