Market Analysis

Swiss National Bank Chairman Thomas Jordan mentioned a "small upward risk" to the central bank's inflation forecast during his speech at the Bank of Korea International Conference in Seoul on Thursday.

Jordan indicated that there are signs the natural rate of interest—a crucial factor for monetary policy decisions—has risen slightly or might increase in the coming years.

"We see this as a minor upward risk to the inflation outlook," he stated. "If this risk materializes, our monetary policy stance would be more accommodative than planned."

He noted that since inflation can vary within the price stability range, the current monetary policy is likely to remain appropriate, even if the natural rate of interest is marginally higher.

Jordan added that if these upward risks to inflation were to occur, they would probably be linked to a weaker Swiss franc, which could be mitigated by selling foreign currency reserves.

Paraphrasing text from "Yahoo Finance" all rights reserved by the original author.