ZURICH - The Swiss National Bank left its policy rate unchanged at zero on Thursday. Banks' sight deposits at the SNB stay remunerated at that rate up to a threshold, with the same 0.25 percentage point discount above it. The bank said it is willing to be active in the foreign-exchange market as necessary. It dropped the June phrase about an increased willingness to intervene.
Inflation has risen since the June assessment, mostly because energy is more expensive. Consumer prices went from 0.6 percent in May to 0.8 percent in August. Goods inflation was positive in August for the first time since May 2024, pulled up by oil products. The SNB said medium-term pressure has increased only slightly, and that the current stance should keep inflation inside the zero to 2 percent range it equates with price stability.
The new Swiss inflation forecast
The conditional forecast, which assumes the policy rate stays at zero for the whole horizon, puts average inflation at 0.7 percent in 2026, 0.8 percent in 2027 and 0.8 percent in 2028. That is a little higher than in June, for the near term because oil cost more than expected, and for the medium term partly because the franc has weakened. The bank expects inflation to rise somewhat further in the fourth quarter, then ease through 2027 as energy inflation fades, before edging up again.
Chairman Martin Schlegel told CNBC the board had looked at that path and judged zero appropriate for now. Traders have talked about a closer call in December, when the next decision is due on the 10th. The SNB did not adopt that timetable. It said monetary policy also supports the economy while the inflation outlook stays inside the band.
A quieter line on the franc
In June, with Middle East tension pushing energy prices and the franc, the bank stressed a greater readiness to sell francs if the currency jumped. Thursday's sentence is the ordinary one: intervention if monetary conditions require it. Analysts read the change as a sign the board is less alarmed by the exchange rate than it was at mid-year. A weaker franc is also one reason the medium-term forecast ticked up.
Food prices are the question the dry summer keeps putting on the table. Schlegel takes that up on Saturday, in an interview we report here. For the European rate backdrop, see the franc note after the ECB hold.