Swiss National Bank holds rate at 0%
The pause is the central bank's first since December 2023, according to a Reuters poll of economists.
Published
The Swiss National Bank left its policy rate unchanged at 0.00% on Thursday, holding steady after a run of cuts that had pushed borrowing costs to zero. The decision marks the bank's first pause since December 2023, according to a Reuters poll of 41 economists.
SNB Chairman Martin Schlegel said earlier this month that negative rates carry "undesirable side effects," a comment Reuters cited as economists weighed the case for a hold. Swiss inflation stood at 0.2% last month, Reuters reported.
At its June meeting, the bank projected inflation averaging 0.6% in both 2026 and 2027, rising to 0.7% in 2028, with growth of 1% this year and 1.5% next year, according to Trading Economics. The same meeting saw the SNB signal greater readiness to step into currency markets, citing global risks including Middle East tensions that could push the franc higher, Trading Economics reported.
The franc has gained about 0.4% against the euro since the start of the year but is expected to lose more than 2% over the next twelve months, according to a separate Reuters survey. Bloomberg reported that investors went into the decision watching whether the SNB remained ready to intervene, after the franc weakened markedly in the run-up to the announcement. Holding the rate at zero while dropping its earlier language on currency intervention points to a central bank now confident the franc can hold its own without extra support, a departure from the easing stance that ran through 2023. That posture reads as more hawkish than a plain hold, leaving less room for further cuts and pointing to tighter monetary conditions ahead for Swiss assets.