This paper deals with current aspects of Swiss monetary policy. The emphasis is on the basic orientation and operational implementation of Swiss monetary policy and the implications which the introduction of the European Monetary Union will have for the policy of the National Bank.

By fundamentally orienting its monetary policy to maintaining price stability, the Swiss National Bank makes the most significant contribution possible to long-term economic development in Switzerland. Central bank independence embodied in the Constitution and a clear mandate offer a maximum guarantee that the National Bank will be able to maintain price stability in the long term.

The National Bank's flexible money supply strategy has much in common with a strategy oriented to an inflation target. A flexible money supply strategy has the advantage of at the same time laying down the operational framework of monetary policy, which enhances the credibility of monetary policy. The National Bank's strategy is also sufficiently flexible to react adequately to disruptions in the short term.

Changeover to the European Monetary Union is expected to be accompanied by a stable euro. The Swiss National Bank will therefore continue pursuing its autonomous monetary policy with price stability as its primary goal.