Swiss central bank member says rate hike may require more

Andrea Maechler, a governing board member of the SNB, gives a speech in Zurich.

SNB Governing Board member Andrea Maechler said on Wednesday that the Swiss National Bank is poised to raise interest rates further to tackle inflation after its recent 75 basis-point hike.

It is possible that we have to make further interest rate increases, Maechler told an event in Zurich. We will have to see over time.

The central bank ended its era of negative interest rates last month when it increased its policy rate to 0.5%, turning its focus to curbing inflation instead of trying to stem the rise of the safe-haven franc.

After being virtually absent for the last 30 years, inflation returned, Maechler said, with Swiss inflation reaching 3.3% in September.

The SNB would monitor its inflation forecasts and work towards getting inflation back to its target of 0 -- 2%, she told the event organised by the KOF Swiss Economic Institute.

Maechler said that the Swiss franc had helped reduce the impact of imported price rises, although the SNB was ready to intervene in the currency markets.

Interest rates are positive, that is a good thing. That means that monetary policy will be more steered through interest rates, which means we are returning to conventional monetary policy. The exchange rate will continue to play an important role in our monetary conditions. Maechler said that we are ready to intervene if the franc is too strong and the Swiss francs are too strong.

If the franc becomes significantly weaker, we are ready to use our balance sheet, that means selling the foreign currency we hold.