month. the consolidated deposit liabilities of the banks, along with the value of notes and coin in circulation, are summarised in the monetary aggregates labelled m1a, m1, m2 and m3. in the past, the change in the broad monetary aggregate m3, relative to a pre - announced desired or guideline rate of change, was used for policy making. this approach to monetary policy making was based on the assumption that there was a fairly stable short - run relationship between changes in m3 and changes in nominal aggregate spending. unfortunately this relationship became less reliable over time. as a result the reserve bank started to monitor a wider variety of economic indicators and, from the beginning of this year, shifted to formal inflation targeting. at present, monetary policy decisions are anchored directly to the achievement of a specified average inflation rate of between 3 and 6 % in 2002. it is important to note that monetary policy decision making is not an exact science, and possibly never will be, even with the most accurate macroeconomic measurements imaginable. this is why the bank cannot base a policy decision on the deviation of a rather uncertain inflation forecast from a targeted future rate. but neither can policy decisions be a matter of sweeping, broad impressions based upon anecdotal evidence and partial information. what the members of the monetary policy committee of the bank do is to make the best professionally informed analysis they can of all the sources of information at their disposal, relating to every important market in the economy. then they constantly review and modify their judgements, in the light of new information as it becomes available. policy decisions are highly complex and the monetary policy committee does not take them lightly. decisions are definitely not two - dimensional and take far more factors into consideration than an inflation and growth perspective. the committee uses a vast array of official economic statistics and financial market data, and all the publicly available and some private surveys and commentaries, to make a decision about the monetary policy stance. what is more, the bank openly releases the facts as they are available to us, as well as the analyses made by the monetary policy committee and by the research staff, regularly through the statements of the committee and in the publication of the quarterly bulletin and the annual economic report. all policy decisions are nevertheless always taken with a view to achieving and maintaining financial stability. 6. concluding remarks some commentators have rather dated views that monetary policy decisions should be aimed at maximising economic growth in the short run. i believe that the primary role of monetary policy is

this has resulted in a renewed deterioration in the economic outlook, at least in the short term. the containment measures implemented thus far are restricting economic activity less than was the case in the spring. however, certain industries are severely affected again, above all hospitality and entertainment. sentiment is also subdued in other industries. economic momentum is thus likely to be weak in q4 2020 and q1 2021. we expect that gdp will shrink by around 3 % this year. at our monetary policy assessment in september, we had anticipated an even stronger decline. the revision is due to the fact that the decrease in gdp resulting from the first wave of the pandemic was not as substantial as originally expected. developments going forward largely depend on how successfully the spread of the virus can be contained in switzerland and abroad. our assumption is that there will not be a significant easing in the containment measures in switzerland until the spring. against this backdrop, we expect gdp growth of 2. 5 % to 3 % for 2021. the recovery thus remains incomplete. unemployment is likely to rise again, and production factors will remain underutilised for some time yet. the forecast for switzerland, as for the global economy, is subject to high uncertainty. monetary policy ’ s contribution to crisis management and outlook prices will decline this year as a result of the coronavirus pandemic, and economic output will be lower than in 2019. production capacity is likely to still be underutilised next year, with inflation still at 0. 0 %. an expansionary monetary policy therefore continues to be necessary for crisis management. our monetary policy contributes to crisis management via three channels. first, we provide favourable financing conditions for swiss businesses and the public sector via the low level of interest rates. this eases the burden on those companies and institutions that face increased funding needs as a result of the crisis. second, the negative interest rate and our foreign exchange market interventions counter the upward pressure on the swiss franc. this pressure is especially high in periods of uncertainty, and a strong appreciation would weigh particularly heavily on the economy in the crisis. we have therefore made considerable foreign exchange purchases this year to maintain appropriate monetary conditions. third, we are making additional liquidity available to banks via the crf, allowing them to refinance the covid - 19 loans they grant and to do so at an interest rate of −0. 75 %. the federal guarantees for the covid - 19 loans and the liquidity provided at favourable conditions by the snb