Switzerland spent many years trying to make monetary targets work, in the face of recurring exchange rate pressures which led it to allow deviations from those targets; in 2000 it began to pursue its own version of inflation targeting, but this was again disrupted by exchange rate pressures which forced it to set a floor for the EUR/SwF exchange rate from late 2011 to early 2015. It then returned, with greater success, to inflation targeting.
| Years | Targets and attainment | Classification |
| 1974 | exchange rate floated late 1973, no other targets, but underlying focus on price stability; monetary policy operated through indirect instruments | loosely structured discretion LSD |
| 1975-77 | monetary targets (point targets for average of 12-month growth rates over year) met but monetary growth volatile; monetary policy aims to control monetary base M0 as instrument to control M1 | loose monetary targeting LMT |
| 1978-81 | monetary targets respectively overshot, suspended, undershot and undershot, in response to appreciating exchange rate | loosely structured discretion LSD |
| 1982-87 | monetary targets (M0, average of 12-month growth rates) met | loose monetary targeting LMT |
| 1988-90 | monetary targets undershot, in context of revisions to liquidity requirements and new interbank clearing system | loosely structured discretion LSD |
| 1991-95 | medium-term monetary target met for 1990-94 target period (but annual growth under and over implied target 1992 and 1993, in context of exchange rate pressures); monetary growth okay 1995; policy operated largely through swap transactions in forex market to affect banks’ reserves | loose monetary targeting LMT |
| 1996-9 | medium-term monetary target increasingly overshot for 1995-99 target period, partial switch of focus to M3 (instead of M0) from late 1997 | loosely structured discretion LSD |
| 2000-2011 | price stability definition of 0-2% on CPI rather than inflation target, focus on medium term, but definition regularly met; operational target range for 3-month SwF LIBOR, pursued via repo transactions; policy decisions forward-looking, forecast-based; some improvements in transparency and central bank independence; 2009-11 rising concern with recurring appreciation pressures despite large forex purchases leads to announcement September 2011 of floor for EUR/SwF exchange rate; macroprudential policies from 2011 | loose inflation targeting LIT |
| 2012-14 | continuing concern with possibility of deflation, and small net deflation on average in 2012 and 2013 (as against 0-2% price stability definition), together with continuing exchange rate floor (one-sided exchange rate target); medium term inflation expectations still anchored (according to SNB’s Quarterly Bulletin) | inflation with exchange rate targeting IwERT |
| 2015-23 | exchange rate floor abandoned early 2015 in response to renewed capital inflows (and massively expanded central bank balance sheet); from 2015 negative interest rates (on marginal deposits at central bank), unsterilised forex purchases, to counter recurring appreciation pressures; 2022 negative interest rates ended, forex sales; price stability range met or nearly met each year with average inflation within 1% of range, while medium- and long-term inflation expectations also within range; strong fiscal and monetary response to Covid-19; early 2023 state-facilitated merger of Credit Suisse with UBS | loose inflation targeting LIT |
Selected IMF references: EDI 1994 ch IV especially Annex I; RED 1995 pp18-26; RED 1996 pp9-10; SISA 1999 pp23-9; SR 2000 pp15-17; SI 2001 pp31-5; SR2002 p13; SR 2009 pp24-7; SR 2010 pp12-16; SR 2011 pp10-14; SI 2012; SR 2013 pp13-15; SR 2014 pp5, 9-11; SR 2015 pp4, 17-18; SR 2016, pp6-9; SR 2018 pp10-13, 16; SR 20019 pp10-13; SR 2021 pp14-17; SR 2023 pp6-7, 27; SI 2024 pp4-7; SR 2024 pp13-15, 30.
Additional sources: Laubach and Posen (1997); Rich (1997, 2000); Baltensperger et al. (2007); Swiss National Bank, Quarterly Bulletin, June 2023, p22.
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Monetary Policy Frameworks 