{
  "title": "Switzerland: Selected Issues",
  "publication": "IMF Staff Country Reports, June 24, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/cr/issues/2024/06/18/switzerland-selected-issues-550654",
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  "summary": "This Selected Issue Paper studies the relationship between monetary policy, financial conditions, and real activity during the current monetary policy-tightening episode in Switzerland.",
  "sections": [
    {
      "heading": "Transmission of monetary policy to financial conditions",
      "content": "- Transmission of policy rates to market rates has been swift.\n- The exchange rate is an important channel through which monetary policy affects financial conditions.\n- Policy rate adjustments affect the average interest rates of mortgages and thus the mortgage reference interest rate, which is a factor for rent adjustments under Swiss regulation."
    },
    {
      "heading": "Effects on real activity and the housing market",
      "content": "- The response of real activity to tightening financial conditions has remained broadly in line with past tightening episodes.\n- Monetary tightening has contributed to a slowdown of private credit and house-price growth.\n- Growth of mortgage loans, which represent 85 percent of bank lending, moderated to 2.4 percent in 2023 from 3.5 percent in 2022."
    },
    {
      "heading": "Household cash flows and rental costs",
      "content": "- The interest rate increase has influenced cash flows for households due to higher mortgage interest expenses.\n- Higher interest rates also lead to higher rental cost for non-homeowners through the mortgage reference interest rate channel and rent adjustment rules."
    },
    {
      "heading": "Study scope and focus",
      "content": "- Examines the relationship between monetary policy, financial conditions, and real activity during the current monetary policy-tightening episode in Switzerland.\n- Reviews various channels through which monetary policy changes affect financial conditions, emphasizing market-rate transmission and exchange-rate effects.\n\nSource: Switzerland: Selected Issues, IMF Staff Country Reports 2024/180.\n\n---\n\n Content in this bundle\n\n- Switzerland: Selected Issues; IMF Country Report No. 24/180; May 22, 2024\n  - Switzerland: Selected Issues; IMF Country Report No. 24/180; May 22, 2024 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Switzerland: Selected Issues; IMF Country Report No. 24/180; May 22, 2024 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: June 24, 2024",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400279164.002",
    "Transmission of policy rates to market rates has been swift.",
    "The exchange rate is an important channel through which monetary policy affects financial conditions.",
    "Policy rate adjustments affect the average interest rates of mortgages and thus the mortgage reference interest rate, which is a factor for rent adjustments under Swiss regulation.",
    "The response of real activity to tightening financial conditions has remained broadly in line with past tightening episodes.",
    "Monetary tightening has contributed to a slowdown of private credit and house-price growth.",
    "Growth of mortgage loans, which represent 85 percent of bank lending, moderated to 2.4 percent in 2023 from 3.5 percent in 2022.",
    "The interest rate increase has influenced cash flows for households due to higher mortgage interest expenses.",
    "Higher interest rates also lead to higher rental cost for non-homeowners through the mortgage reference interest rate channel and rent adjustment rules.",
    "Examines the relationship between monetary policy, financial conditions, and real activity during the current monetary policy-tightening episode in Switzerland.",
    "Reviews various channels through which monetary policy changes affect financial conditions, emphasizing market-rate transmission and exchange-rate effects.",
    "**Switzerland: Selected Issues; IMF Country Report No. 24/180; May 22, 2024**"
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