SNB Expected to Stay Put Until 2028 Amid Eased Franc Appreciation

The Swiss National Bank (SNB) is expected to keep its policy rate unchanged at 0% next week, according to a preview by Bank of America Global Research. The SNB's decision comes as appreciation pressures on the Swiss franc have eased somewhat over the summer, with the CHF down 3.3% in real effective terms year-to-date.

However, despite this slight easing, BofA notes that they do not anticipate a return to the pre-March wording, which mentioned the SNB's 'willingness to be active in the foreign exchange market as necessary.' The SNB has retained its language signaling an 'increased readiness to intervene in foreign exchange markets.'

BofA also highlights that their base case remains that the SNB stays on hold until 2028, in contrast to market pricing. This means that the SNB is unlikely to make any changes to its policy rate or intervention strategies anytime soon.