Martin Schlegel: Interest rates and foreign exchange interventions - achieving price stability in challenging times

Public lecture by Mr Martin Schlegel, Vice Chairman of the Governing Board of the Swiss National Bank, at the International Centre for Monetary and Banking Studies (ICMB), Geneva, 9 April 2024. 

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and gentlemen

It is a pleasure to be here today at the ICMB in Geneva. Geneva epitomises the Swiss economy: small and open. Geneva is small: it is located in one large economy, Switzerland, and neighboured by another, France. Geneva is also open, and is a hub for over 100 international organisations. In fact, the WTO and the UN are in walking distance from us here at the Maison de la Paix.

By comparison with its neighbours, however, Switzerland can also be said to be small. It is surrounded by the European Economic Area, the second-largest economy in the world. As an open economy, Switzerland is heavily dependent on foreign demand. If our trading partners' economies are booming, so does ours. If there is a slowdown abroad, our economy slows down too. Due to this tight economic integration, the exchange rate plays a crucial role – for the economy, for inflation and for monetary policy.

Tonight, I would like to look back at our monetary policy over the past fifteen years, with a particular focus on the exchange rate and foreign exchange interventions.