Swiss consumer prices fell at a slightly slower pace on an annual basis in May, data showed on Thursday, but still-weak price pressure continued to support the case for the Swiss National Bank to keep a lid on the franc to ward off deflation.
Prices rose 0.1 percent month-on-month, in line with average analyst forecasts and up from zero in April. Prices fell 0.5 percent on the year, just beating forecasts for a drop of 0.6 percent.
The Federal Statistics Office said while rents, food, clothes and organised travel became more expensive, prices for oil products continued to fall.
“There are still no signs of inflationary dangers, meaning the SNB can stick to its policy. It shows the introduction of the exchange rate floor was justified,” said ZKB economist David Marmet.
Seeking to prevent deflation and a recession, the SNB capped the franc at 1.20 per euro in September 2011 after investors looking for a safe haven from the euro zone crisis had pushed the Swiss currency from one record high to another.
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