The decision to keep the interest rate at 0.0% is in line with what analysts had expected.
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In an international environment marked by profound uncertainty, the Swiss National Bank (SNB) is leaving its monetary policy unchanged: the institution is keeping its benchmark rate at 0.0%, the level at which it has been since June 2025.
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This is the third consecutive time that the entity has opted for stability. The move, announced on Thursday as part of the traditional quarterly review of the economic and monetary situation, is in line with what analysts had expected. According to the experts, given the low inflation rate (0.1% in February, the same level as in January and December), there was no reason to act, especially as the rise in energy prices in the wake of the war in the Middle East should be cushioned by the strength of the Swiss franc.
On Wednesday, the United States Federal Reserve left rates unchanged and continues to expect only one reduction in the cost of money this year. The European Central Bank (ECB), scheduled to meet on Thursday, is expected to maintain its current course.
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The SNB must also weigh its moves carefully, avoiding lending its flank to accusations by the US of currency manipulation, at a delicate time when Bern is trying to negotiate a new trade agreement with Washington, against a backdrop of great uncertainty over tariffs.
Sharp rise in inflation expected
The conflict in the Middle East, however, has led the SNB to revise its macroeconomic forecasts, particularly those relating to inflation. “With the rise in energy prices […] inflation is expected to rise more sharply over the coming quarters,” said Martin Schlegel, SNB board chair, on Thursday.
This acceleration is expected to be short-lived, he added. The appreciation of the franc should help to contain inflation in the medium term. The situation remains under control, as inflation “is within the price stability range,” Schlegel said.
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The SNB is now forecasting an inflation rate of 0.5% for 2026, up from 0.3% previously. For next year, the forecast has been revised down to 0.5% from 0.6%.
The strength of the franc remains one of the SNB governor’s main concerns. “The trade-weighted value of the franc has […] risen by around 2.5% since mid-December,” he said. This appreciation, he added, has led to a “tightening of monetary conditions”, which “reduces imported inflation and slows down growth.”
Dampening appeal of the franc
However, low interest rates in Switzerland are reducing the appeal of investments in the franc, thereby easing some of the pressure on this safe-haven currency. “The expansionary effect of low interest rates is also reflected in robust credit growth. Our monetary policy is therefore supporting economic activity,” said Schlegel.
The SNB chief acknowledged a rise in economic and monetary uncertainties. “A rapid and excessive appreciation of the franc poses a risk to price stability. To counter this risk, we are more willing to intervene in the foreign exchange market,” he said.
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