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SWISS NATIONAL BANK ON INFLATION


To:     The Right Honourable Swiss National Bank President Mr. Thomas Jordon

From: Athinarayanan Sanjeevraja

Date: November 12, 2018

RE:     Inflation

Suggestion:
Mr. President let me start by paying my respects to you and through you to. The Swiss National Bank introduced a unique monetary policy framework which is based on inflation forecast in 2000. It was successful most of the time in reaching its mail goal. Swiss inflation hit to 1.2% for the first time since 2011. If I am not mistaken, soaring oil prices, more expensive imports and SNB exchange rate intervention drove Swiss inflation to 1.2%. Swiss inflation momentum is improving gradually. I do expect that Swiss inflation will range from 1 to 1.3 over the next couple of years. PPP (Purchasing Power Parity) will compensate for the difference in inflation between the currency zones. I fervently hope that Hon. President to keep inflation in check and to ensure the health of Swiss financial market. IMHO, price stability not as an end in itself but Hon. President should showed disciplined and reflected commitment to the goal of effectively and predictably stable prices. And also means of achieving stable and sustainable Swiss growth. There are many research concluded that the exchange rate intervention did indeed enhance into inflation. Svensson (2000) pointed out the success of exchange rate intervention lies in the inflation expectation. As an Analyst I do believe that exchange rate intervention is a convenient unconventional monetary policy tool. In my humble request to Hon. President, the exchange rate intervention should not stop until the SNB reaches its inflation goal.      
      
Thank you very much for your attention.
Respectfully yours
Athinarayanan Sanjeevraja.
Athinarayanan Twitter
Athinarayanan Advisory Authority.

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