SNB SAYS INCREASED WILLINGNESS TO INTERVENE NO LONGER NECESSARY
According to the summary of the SNB’s September monetary policy discussions, the SNB Governing Board maintained its policy rate at 0%, judging the prevailing monetary conditions appropriate to ensure price stability over the medium term.
Wider international interest-rate differentials and low exchange-rate volatility had increased the Swiss Franc’s appeal as a funding currency for carry trades. Between June and September, the Franc depreciated approximately 3% on a trade-weighted basis. Although Swiss market interest rates increased slightly over the same period, the SNB concluded that currency depreciation more than offset their tightening effect, leaving overall monetary conditions easier.
The SNB reiterated its willingness to remain active in foreign exchange markets when necessary, but concluded that “an increased willingness to intervene is no longer necessary in the current environment.” ActionForex notes that this reflects easier monetary conditions following the Franc’s depreciation rather than a withdrawal of the SNB’s broader intervention option.
Swiss inflation remained relatively constant. Headline inflation reached 0.8% in August, primarily reflecting higher oil-product prices, while the SNB’s trimmed-mean core inflation measure stood at 0.6%. Policymakers found little evidence of second-round inflation effects, and inflation expectations remained well anchored.
The SNB also reported resilient economic activity and upgraded its 2026 GDP growth forecast to 1.5%–2.0%, while growth of approximately 1.5% is expected in 2027. Although prolonged elevated energy prices could generate additional inflation risks, the central bank expects inflation to remain within the range consistent with price stability throughout its forecast horizon.
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