* Keeps policy rate at -0.75% as expected<\/p>\n
* SNB raises inflation outlook amid higher oil prices<\/p>\n
* Says will intervene on forex markets \u201cas necessary\u201d (Adds details, analysts)<\/p>\n
ZURICH, March 25 (Reuters) – The Swiss National Bank dialed back its verbal commitment to foreign currency interventions and raised its inflation outlook on Thursday, although analysts said this shouldn\u2019t be seen as signaling the central bank quitting its ultra-expansive policy.<\/p>\n
The SNB caused no surprise on Thursday when it kept its policy rate locked at minus 0.75% as unanimously forecast by economists in a Reuters poll.<\/p>\n
It reiterated its commitment to the expansive policy it has kept in place since 2015, spearheaded by the world\u2019s lowest interest rate.<\/p>\n
This was despite the franc losing 3% of its value versus the euro this year as safe-haven inflows eased.<\/p>\n
\u201cDespite the recent weakening, the Swiss franc remains highly valued. With a view to stabilising economic activity and price developments, the SNB is maintaining its expansionary monetary policy,\u201d the SNB said.<\/p>\n
The central bank said it remained committed to currency interventions, albeit using less forceful language than at its last rates decision in December.<\/p>\n
Then the bank had said it was willing to intervene \u201cmore strongly\u201d in the forex markets, but on Thursday the bank only said it would intervene \u201cas necessary\u201d.<\/p>\n
\u201cThere is a change in their willingness to intervene,\u201d said UBS economist Alessandro Bee.<\/p>\n
\u201cBut this not a change in monetary policy. It just reflects the fact that EUR-CHF is now at a level where the SNB is not willing any more to intervene.\u201d<\/p>\n
The SNB\u2019s currency interventions rose to 110 billion Swiss francs ($117.52 billion) during 2020, its highest level since 2012.<\/p>\n
The increased spending inflated the SNB\u2019s balance sheet to close to 1 trillion francs, much larger than the size of the entire Swiss economy.<\/p>\n
The bank also increased its inflation outlook, primarily due to a rise in oil prices and the weaker franc.<\/p>\n
\u201cAs long as the SNB sees an increase of the inflation rate as temporary, an increase of the target rates is far away,\u201d said St Galler Kantonalbank economist Thomas Stucki.<\/p>\n
\u201cThe SNB will wait for the ECB, and the ECB will wait for the Fed.\u201d<\/p>\n