element in the snb ’ s monetary policy, and just last week, at our monetary policy assessment, we decided that it should be maintained. although the recovery of the global economy continued in the fourth quarter of 2013, substantial risks remain. in addition, the conditional inflation forecast for switzerland has been adjusted downwards in comparison to december. internationally declining inflation rates and the slightly stronger swiss franc are delaying the rise of inflation into positive territory. the snb is now expecting inflation of 0 % in the current year and 0. 4 % in 2015. in 2016, inflation should increase to 1. 0 %. furthermore, the value of the swiss franc is still high. with the three - month libor close to zero, the minimum exchange rate continues to be the right tool to avoid an undesirable tightening of monetary conditions in the event of renewed upward pressure on the swiss franc. through the minimum exchange rate, therefore, we are in a position to fulfil our price stability mandate. however, the consistent enforcement of the minimum exchange rate has contributed to the substantial increase in our currency reserves. slide 1 shows that, since 2009, our currency reserves have increased by a factor of about six, and the foreign bis central bankers ’ speeches exchange reserves are almost ten times higher. our foreign exchange reserves, that is, currency reserves excluding gold, currently amount to almost chf 450 billion, which is over 70 % of switzerland ’ s annual economic output. the expansion of our foreign exchange reserves means that our balance sheet is more exposed to the volatility of the financial markets than it used to be. even slight price changes can have a strong influence on our investment performance. this has made our investment policy even more challenging. however, thanks to established processes and a high level of expertise, we are in a position to meet these demands. history of investment policy at the snb at the snb, the move towards a sustainable investment policy aimed at optimising risk and return began as early as the 1970s. at that time, the management of foreign exchange reserves focused exclusively on the highest possible level of security and liquidity. imagine a situation whereby, until 1978, a residual term of only three months was a legal requirement. as a result, foreign exchange reserves consisted primarily of short - term us dollar investments, particularly us treasury bills. this led to considerable concentration risk. at the same time, the potential return was extremely low. despite narrow statutory provisions and market - related limitations, the

’ s gdp is likely to grow by around 1 % this year. in this environment, unemployment is likely to continue to rise gradually, and the utilisation of production capacity is likely to decline somewhat further. our forecast for switzerland, as for the global economy, is subject to significant uncertainty. the main risk is weaker economic activity abroad. monetary policy outlook ladies and gentlemen, allow me to return to our monetary policy. following the coronavirus pandemic, inflation rose strongly worldwide. in many countries, the increase in inflation proved to be more persistent than at first assumed. the snb began tightening its monetary policy at an early stage. we initially allowed the swiss franc to appreciate and then from june 2022 onwards raised the snb policy rate by a total of 2. 5 percentage points. in addition to this, we sold foreign exchange. page 3 / 6 zurich, 21 march 2024 thomas jordan, martin schlegel and antoine martin news conference tightening monetary conditions in this way had various advantages. first, the appreciation of the swiss franc significantly weakened the transmission of inflation from abroad. the increase in inflation in switzerland was therefore considerably smaller than in other countries. second, we had to raise our policy rate only moderately by international comparison. this also prevented a stronger rise in the mortgage reference interest rate. the tightening of our monetary policy led to inflation being above 2 % only for a short time, and rapidly decreased from its peak of 3. 5 % in august 2022 to the current level of 1. 2 %. inflation expectations remained well anchored throughout this period. overall, the secondround effects were limited. over the past three months, the underlying inflationary pressure has decreased further. this is reflected in our conditional inflation forecast, which we have revised down significantly compared with december. it is within the range of price stability over the entire forecast horizon. having already decided in december to no longer focus on sales of foreign exchange, we can now lower the snb policy rate by 0. 25 percentage points to 1. 5 %. our decision takes into account the significantly reduced inflationary pressure as well as the appreciation of the swiss franc in real terms over the past year. it also supports economic activity. with today ’ s easing, we are ensuring that monetary conditions remain appropriate. however, in the current environment uncertainty is still elevated. we will therefore monitor the ongoing development of inflation closely. if necessary we will adjust our monetary policy again. we also remain willing to be active