Swiss Monetary Targeting 1974-1996: The Role Of Internal Policy Analysis

Date Added: Sep 2009
Format: PDF

The Swiss National Bank (SNB), Switzerland's central bank, adopted monetary targeting at the end of 1974. The switch to a "Monetarist" policy strategy was motivated by the global surge in inflation setting in towards the end of the 1960s. Since Switzerland adhered to a fixed exchange rate at that time, the SNB was not able to shield the domestic economy from foreign inflation. Although it strove to curb the price increases by means of quantitative restrictions on domestic credit growth, its efforts to check inflation were of no avail.