SNB Holds Fire: No Rate Hike Until 2028
Bank of America's Global Research team has previewed the upcoming Swiss National Bank (SNB) meeting, set to take place next Thursday. According to their analysis, the SNB is likely to leave its policy rate unchanged at 0% next week. The reference to FX interventions in the policy statement is also expected to remain the same, indicating an increased readiness to intervene in foreign exchange markets.
The Swiss franc has seen some appreciation pressures ease this summer, with a 3.3% year-to-date decline in real effective terms. However, Bank of America does not anticipate a return to the pre-March wording, which mentioned a 'willingness to be active in the foreign exchange market as necessary'. The team believes that the SNB will maintain its current stance until 2028.
Bank of America notes that next week's communication should reinforce the SNB's determination to preserve full optionality and retain all policy instruments at its disposal. This suggests that the SNB is not planning any significant changes in the short term.