The federal government's strict expenditure controls should reduce the deficit to below 3 percent in 1998. No systematic use is made of fiscal policy to stimulate the economy. In October 1996, however, the Swiss National Council voted to spend SFr 250 million on an investment bonus to support the sluggish economy. If the measure is approved in the Upper House, the stimulus package will support projects in the construction and energy sectors. The main objective of the SNB's policy is price stability.
Monetary policy is conducted through open market operations.
The discount rate is used by the SNB only as a signal to the public. Since the extremely weak domestic economic outlook became clear, the SNB has prevented further appreciation of the Swiss franc by accelerating growth of the money supply. The high Swiss franc had been seen as one of the main reasons for the weak performance of exports. In the mid and long term, the SNB does not follow any exchange rate policy, and the Swiss franc is not pegged to any foreign currency. Few structural policies have a significant effect on U. S. exports.