At first glance, the international competitiveness of Swiss companies has little to do with the monetary policy of the Swiss National Bank (SNB), as competitiveness depends first and foremost on companies and their ability to innovate. In addition, local factors, such as the educational standard of the population and the quality of the infrastructure, play a decisive role in economic development. However, the macroeconomic environment is also important for companies, and this is shaped by monetary and financial policy. Price stability and sound public finances make it easier for companies to plan, especially as regards investment. So, by fulfilling its mandate and ensuring price stability, the SNB makes an indirect contribution to the competitiveness of the Swiss economy.

Yet the high degree of macroeconomic stability is also a factor in the strength of the Swiss franc, which reduces Swiss companies' price competitiveness compared to their foreign rivals - at least in the short term. In the long term, by contrast, there is no contradiction between a strong currency and an economy's competitiveness - as demonstrated by Switzerland's own experience over the past few decades.

Nevertheless, exchange rates play an important role in the SNB's monetary policymaking. Because Switzerland is so closely integrated into the global economy, exchange rate movements can have far-reaching consequences for economic and price developments. If the speed and magnitude of a Swiss franc appreciation threatens macroeconomic stability, it may be necessary for the SNB to intervene directly on the foreign exchange market. This is particularly the case when other monetary policy tools are no longer sufficient to ward off a destabilisation of the economy. However, considerable risks accompany foreign exchange market interventions. Thus, the benefits of an active exchange rate policy need to be properly weighed against the costs for the economy as a whole.

The SNB's current monetary policy shows that business as usual is still a long way off. The Swiss franc continues to be considerably overvalued and the global economic recovery is still not firmly bedded in. Against this background, it is essential that the SNB impose negative interest on sight deposits and be willing to intervene as necessary in the foreign exchange market. This reduces the pressure on the Swiss franc and, in turn, the risks to price and economic developments which may arise as a result of an appreciation.