SNB Keeps Policy Rate Unchanged Amid Rising Inflation and Energy Prices

The Swiss National Bank (SNB) has kept its policy rate unchanged at 0% following a monetary policy decision. Chairman Thomas J. Jordan emphasized that banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold, while the discount for sight deposits above this threshold remains at 0.25 percentage points.

The SNB also expressed its willingness to intervene in foreign exchange markets as necessary to ensure appropriate monetary conditions. This comes amid rising inflation, which has increased from 0.6% in May to 0.8% in August, primarily due to higher energy prices. Goods inflation rose for the first time since May 2024, mainly driven by higher oil product prices.

In a conditional inflation forecast, the SNB expects inflation to continue rising slightly in the fourth quarter before declining again over the course of 2027. This decrease is attributed to the expected decline in energy inflation, which has been significantly elevated.