After looking back on the year 1998, the Chairman of the Governing Board of the Swiss National Bank, Hans Meyer, in the second part of his speech, commented on monetary policy in 1999. In a third section he dealt with a number of basic problems of monetary policy, while the fourth part was devoted to the National Bank's mandate.

The various relevant indicators did not necessitate a tightening of monetary policy in 1999. Monetary policy planning, however, rests largely on forecasts. Accordingly, the course of monetary policy has to be constantly checked against any new information and, if necessary, be adjusted.

The National Bank pursues a flexible strategy. It tries to achieve the goal of price stability by orienting itself both to the development of the monetary aggregates and to other indicators. Its monetary policy is pragmatic in the sense that the number of indicators used is not final and the weight allotted to individual indicators is not fixed from the start.

Monetary policy decisions are to a considerable extent discretionary decisions. For this very reason, it is important that the National Bank's mandate is clear and unequivocal. The new monetary article gives the National Bank a mandate to pursue a monetary policy which serves the interests of the country as a whole, with the goal of price stability having priority. In order to achieve the best overall effectiveness, good use must be made of every economic policy instrument according to the particular advantages it offers. There is a certain long-term connection between the supply of money and price stability. What is, in the final analysis, important, therefore, is to adjust the supply of money adequately to real economic development. In this way, price stability can be ensured. This is not an end in itself, but a major contribution to balanced economic development. Last but not least, it is also a social concern since the weakest members of society suffer the most from inflation.