Nomura reports that the Swiss National Bank kept its policy rate at 0.00% in June and reiterated an increased willingness to intervene in FX markets if necessary to curb Swiss Franc strength. With inflation still within the 0–2% target and only slightly higher near-term projections, Nomura expects the SNB to hold rates at 0.00% for the foreseeable future.

SNB holds rates and keeps FX tool ready

"The Swiss National Bank (SNB) left its policy rate at 0.00% at its June meeting, as we and consensus expected. It maintained guidance, introduced at the last meeting, that it has ​​​​​​”an increased willingness to intervene” in FX markets to curb CHF appreciation pressures, in line with what we expected."

"However, in a very marginal change, it added that it will do so “if necessary”, perhaps in acknowledgement that CHF has depreciated against EUR since March. Indeed, at the press conference Chairman Schlegel noted that CHF has depreciated since the last decision and the adjustment of the statement language was appropriate."

"The SNB revised up its conditional inflation forecast for 2026, as a result of energy price pressures, to 0.6% (from 0.5%). However, it sees medium-term inflationary pressures as virtually unchanged compared with the previous forecast (Figure 3)."

"The SNB highlighted the resilience of the Swiss economy despite risks from the Iran war, and maintained its expectation that GDP growth will be around 1% for 2026 as a whole."

"We believe the SNB will leave its policy rate unchanged at 0.00% for the foreseeable future. The SNB has some breathing space, as inflation is comfortably within its target range of 0-2%. Higher global energy prices have added upward inflation pressure, which likely reduces any urgency to discuss lowering the policy rate into negative territory to prevent deflation."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)