At its most recent monetary policy assessment about a month ago, the SNB published its new inflation forecast. The forecast shows that, assuming an unchanged interest rate policy, inflation will rise gradually over the coming quarters, and will exceed 1.0% in 2018 (cf. chart 12). So the forecast suggests that current monetary policy is appropriate. For this reason, in December the SNB decided to continue its expansionary policy. This is based on two elements: first, an interest rate of –0.75% on sight deposits at the SNB combined with a target range for the three-month Libor of between –1.25% and –0.25%; second, the SNB’s willingness to influence exchange rate developments if necessary. The negative interest rate and the willingness to intervene on the foreign exchange market serve to make investments in Swiss francs less attractive, and thereby reduce the pressure on our currency. These measures demonstrate that business as usual is still a long way off. During the crises of the last few years, recurring safe-haven flows of both domestic and foreign capital have led to severe upward pressure on the Swiss franc. Despite weakening somewhat over recent months, the franc is still considerably overvalued, as chart 13 illustrates. The blue curve shows changes in the inflation-adjusted, trade-weighted Swiss franc exchange rate. The yellow bars mark deviations from the long-term average, which is currently around 15%. At the same time, the global economic recovery is still not firmly bedded in. Our current monetary policy is tailored to these circumstances.
As of now, there are 13 companies holding Treasury Center licenses, of which 4 have been granted in the past 3 months, with one more awaiting approval from the Ministry of Finance. Many more have also made inquiries, which I am pleased to see. The second area is to foster the growth of regional capital markets. Apart from the banking sector, well-developed capital markets are critical to nurture sustainable development of financial interconnections. In this light, Thailand is playing a proactive role to enhance our capital market capacity, aiming to link up GMS capital markets with global investors. Firms from the GMS 7 can raise funds through the Thai capital market to facilitate their businesses, while global investors can invest in products with GMS exposure. As I mentioned earlier, we have seen successful and fast-selling baht bonds, issued in Thailand by the Lao government and corporates. A few years ago, we allowed companies operating in the GMS to be listed on the Thai stock exchange using the holding company structure. In addition, Thailand offers a more opened platform for GMS investors and global players looking for opportunities in the GMS. A new rule has allowed foreign firms, including those from the GMS, to launch IPOs in Thailand and become listed in the Thai stock exchange. This is aimed to provide global investors with wider choices of investment, and to provide an ideal financing destination for both GMS members and global players. The last area of policy to promote GMS financial connectivity is the better-connected payment networks.