SNB Holds Interest Rates Steady as Inflation Ticks Up

The Swiss National Bank (SNB) kept its key interest rate at 0% despite inflation rising to 0.8% in August, largely due to increased energy costs.

According to Finimize, the SNB aims to maintain borrowing conditions that are easy without encouraging banks to hoard unlimited cash. To achieve this, they have a tiered system for 'sight deposits' where up to a certain threshold earns the policy rate, but amounts above it earn 0.25 percentage points less.

The inflation increase is largely attributed to rising energy costs, with oil products pushing goods inflation back into positive territory. However, the SNB's forecast remains unchanged, predicting an average of 0.7% in 2026 and 0.8% in 2027 and 2028.