The Swiss National Bank (SNB) left its policy rate unchanged at 0% on Thursday. The decision was widely expected by the markets, and the Swiss Franc has shown a muted response to the announcement.
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In its rate statement, the central bank stated that would be willing to intervene in the FX markets if needed. This was not unusual, as the SNB views currency intervention as a tool to keep that Swiss franc at levels that the Bank considers appropriate. What was of interest was that the wording indicated a softening in the SNB’s stance on currency intervention. The statement said the SNB was, “willing to be active in the foreign exchange market as necessary to ensure appropriate monetary conditions.” At the July meeting, the SNB statement was more forceful, stating that “if necessary, the SNB has an increased willingness to intervene in the foreign exchange market.” At the follow-up press conference, SNB Chair Martin Schlegel reiterated that the SNB would intervene if necessary.
SNB: Inflation will Remain Steady
On the inflation front, the SNB projected that a rise in inflation will be minimal. The Bank expects that inflation will remain on average between 0.7% and 0.8% in 2026 and 2027, slightly higher than the previous estimates of between 0.6% and 0.7%. However, the central bank is projecting that inflation will rise to 1.2% in the fourth quarter, due to higher oil prices. The SNB said that its monetary policy of zero was appropriate for maintaining price stability and supporting economic growth.
The SNB likes to keep a close eye on the Swiss franc, which has weakened lately. The currency is down 2.4% against the US Dollar in the month of September and is trading at its lowest levels since May 2025. That is good news for exports, but the central bank doesn’t want the Swissy to fall too low, as that could generate inflation. This is likely the reason that the rate statement mentioned the possibility of currency intervention, although the markets are unlikely to consider intervention likely anytime soon. If this trend continues, we can expect to hear additional warnings about intervention from the SNB.
Swiss Franc Slightly Higher, Stock Market Posts Losses
The Swiss Franc is showing limited movement in the aftermath of today’s rate decision. The USD/CHF currency pair is currently trading at 0.8274, up 0.27% on the day. The CHF/JPY currency pair and EUR/CHF currency pair are also showing modest movement on Thursday.
The Swiss market index is showing slight losses today, down 58.4 points (0.42%) at 13.863.32.
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