SNB Chairman warns of the side effects of negative interest rates
Keystone-SDA
The Swiss National Bank (SNB) takes a critical view of the reintroduction of negative interest rates.
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“We are aware that the negative interest rate can have undesirable side effects, for example for savers and pension funds,” it says.
“The hurdle to reintroducing it is high,” said SNB President Martin Schlegel in an interview with Migros Magazin. The SNB recently lowered the key interest rate to zero and will announce its next monetary policy decision on September 25.
On the question of whether the SNB had shot its monetary policy powder too early, Schlegel emphasised that forward-looking action is key. “In monetary policy, you can’t wait and see when a decision is necessary. Otherwise you have to take stronger countermeasures later,” he said.
+ Trump’s tariffs raise risk of negative interest rates in Switzerland
Schlegel reacted calmly to the strength of the franc. “Exchange rates can hardly be predicted. The franc has mainly appreciated against the dollar. In real terms, however, the appreciation is not as great as it seems at first glance.”
Commenting on the impact of the US tariffs, Schlegel said they initially create a lot of uncertainty. “Many companies are investing less, and that has a negative impact on the economy. Individual companies may be severely affected, but the overall impact remains to be seen,” he said.
Translated from German by DeepL/ts
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