news conference berne, 14 december 2017 thomas jordan introductory remarks by thomas jordan ladies and gentlemen it is a pleasure for me to welcome you to the swiss national bank ’ s news conference. i will begin by explaining our monetary policy decision and our assessment of the economic situation. i will then hand over to fritz zurbrugg, who will speak about current developments in the area of financial stability. after that, andrea maechler will review the situation on the financial markets and the progress in reference interest rate reform. finally, we will – as ever – be pleased to take your questions. monetary policy decision let me begin with our monetary policy decision and the inflation forecast. we are maintaining our expansionary monetary policy in order to stabilise price developments and support economic activity. interest on sight deposits at the snb is to remain at – 0. 75 % and the target range for the three - month libor is unchanged at between – 1. 25 % and – 0. 25 %. we will remain active in the foreign exchange market as necessary, while taking the overall currency situation into consideration. the swiss franc has depreciated in recent months. the overvaluation has thereby decreased, yet overall the franc remains highly valued. the depreciation of the franc reflects the fact that safe havens are currently less sought after. however, this development is still fragile. therefore, despite the easing of the situation, the negative interest rate and our willingness to intervene in the foreign exchange market as necessary remain essential. these measures keep the attractiveness of swiss franc investments low and thus ease pressure on the currency. a renewed appreciation would still be a threat to price and economic developments. the new conditional inflation forecast for the coming quarters is higher than it was in september. this is mainly due to increased oil prices and the further weakening of the swiss page 1 / 4 berne, 14 december 2017 thomas jordan news conference franc. the longer - term inflation forecast is virtually unchanged. for the current year, it has risen marginally to 0. 5 %, from 0. 4 % in the previous quarter. for 2018, we anticipate an inflation rate of 0. 7 %, compared to 0. 4 % in september. for 2019, we continue to expect inflation of 1. 1 %. the conditional inflation forecast is based on the assumption that the threemonth libor remains at – 0. 75 % over the entire forecast horizon. global economic outlook i would now

like to turn to economic developments abroad, as these have a considerable bearing on the inflation and economic outlook in switzerland. the past few months have seen further improvements in the international environment. the global economy exhibited strong, broad - based growth in the third quarter. international trade, in particular, remained very dynamic. in view of companies ’ improved capacity utilisation and growing confidence, investment continued to recover. developments in employment remained positive, which helped to raise household confidence, too. in most countries, inflation moved sideways. economic signals for the coming months are positive, as well. we expect the global economy to continue developing favourably. for the euro area and the us, we have revised our growth forecasts slightly upwards. economic recovery and convergence with the inflation target are most advanced in the us. this prompted the us federal reserve to carry out a number of interest rate adjustments and to initiate the reduction of the balance sheet this year. the coming quarters are likely to see a gradual continuation of monetary policy normalisation in the us. by contrast, the european central bank intends to pursue its asset purchase programme until at least september 2018, and to leave its key rates unchanged beyond that horizon. in japan, too, monetary policy is expected to remain expansionary. alongside the global economic baseline scenario, the risks also need to be taken into consideration. in the short term, global growth could be stronger than projected in the baseline scenario, due to the significant upturn in household and business confidence. in the medium term, however, risks for the international economy are still to the downside. these risks include ongoing structural weaknesses, political developments in certain countries, and potential international tensions. furthermore, the normalisation of monetary policy in the advanced economies presents challenges. an abrupt rise in the currently very low capital market interest rates and risk premia, in particular, could negatively impact the global economy. swiss economic outlook i shall now turn to the economic outlook for switzerland. gdp grew in the third quarter at an annualised 2. 5 %, lending further momentum to the economic recovery. growth was primarily driven by manufacturing, which benefited from page 2 / 4 berne, 14 december 2017 thomas jordan news conference dynamic global economic developments and the weaker swiss franc. accordingly, exports recorded marked gains. investment in equipment also grew noticeably. in the wake of this development, capacity utilisation in manufacturing increased further. the overall economic situation improved, too. higher capacity utilisation, a more robust earnings situation and favourable global economic