SNB Holds Interest Rate at Zero Percent Amid Rising Inflation

The Swiss National Bank (SNB) has kept its benchmark interest rate at zero percent. This decision was expected, given recent tightening by major central banks. Chairman Martin Schlegel stated that the current monetary policy is appropriate for keeping inflation within a stable range and supporting economic growth.

However, inflation has risen since the bank's last update in June, mainly driven by higher oil prices. Swiss inflation accelerated to 0.8 percent year-on-year in August from 0.4 percent in July. The SNB raised its inflation forecast for this year to 0.7 percent and next year to 0.8 percent.

The bank also lifted its economic growth forecast, expecting GDP growth of 1.5 to 2 percent this year, up from a previous estimate of around 1 percent. The SNB noted that the Swiss franc has depreciated by around 3 percent since June and is easing upward pressure on the currency.

Despite the recent depreciation, Chairman Schlegel warned about uncertainty in inflation and economic developments, particularly regarding energy prices. He stated that the bank will continue to monitor the situation and adjust its monetary policy if necessary.