SNB Holds Rate at Zero, Softens Franc Intervention Stance, Raises Inflation & Growth Forecasts
| Pair | Now | Since publish |
|---|---|---|
| EURCHF | — | — |
| USDCHF | — | — |
| GBPCHF | — | — |
- SNB holds rate at 0%, raises 2026 inflation to 0.7%, 2027/28 to 0.8%.
- 2026 growth forecast raised to 1.5-2%, intervention language softened.
- Swiss franc fell post-decision due to softer intervention, carry trades.
The Swiss National Bank (SNB) kept its key policy rate unchanged at 0% on Thursday, September 24, a decision widely anticipated by market participants. This stance continues to diverge from major central banks like the US Federal Reserve and the European Central Bank, which have initiated tightening cycles. Despite a modest rise in August headline inflation to 0.8% and an upward revision of its future inflation forecasts for 2026, 2027, and 2028 to 0.7% and 0.8%, the SNB indicated that medium-term inflationary pressures have increased only slightly. The central bank also toned down its explicit threat of intervention to weaken the Swiss Franc, though it affirmed its readiness to act in the foreign exchange market as necessary. While Swiss economic growth has surprised on the upside, analysts suggest the SNB may eventually face pressure to align with the global trend of rate hikes.
The Swiss National Bank (SNB) maintained its policy rate at 0%, as widely anticipated. The central bank updated its inflation forecasts, now projecting 0.7% for 2026 (up from 0.6%) and 0.8% for both 2027 and 2028 (up from 0.6% and 0.7% respectively). Growth forecasts for 2026 were raised to 1.5-2% (from 1%). A significant policy shift was noted in the SNB’s foreign exchange intervention language, which was softened from an “increased willingness to intervene” to being “willing to be active in the FX market as necessary.” This change suggests a reduced bias towards weakening the franc. SNB officials, including Chairman Martin Schlegel and Vice Chairman Antoine Martin, attributed the rise in inflation primarily to higher energy prices and a weakening Swiss Franc, though they noted medium-term inflationary pressure has increased only slightly. Banks’ sight deposits at the SNB will continue to be remunerated at the policy rate up to a certain threshold, with the discount for deposits above this threshold remaining at 0.25 percentage points.
The Swiss National Bank (SNB) assessed its monetary policy as appropriate for maintaining price stability and supporting economic development. Historically, the central bank had lowered its key rate by 175 basis points since March 2024 and exited negative rates in 2022 after more than seven years. Following the decision, the Swiss franc fell, with market analysts attributing the decline to the SNB’s softer intervention language and the influence of carry trades weighing on demand for the currency.