SNB Keeps Policy Rate Unchanged at 0% Amid Revisions to Inflation Projections

The Swiss National Bank (SNB) kept its policy rate unchanged at 0% in September, as widely expected. The key policy rate has been stuck at this level since March 2015.

In a statement accompanying the decision, the SNB said it is willing to be active in the foreign exchange market as necessary to ensure appropriate monetary conditions. This marks a subtle shift from its previous stance on intervening in the FX market, which had become increasingly bearish on the Swiss franc's strength.

The SNB's inflation projections for 2026 and 2027 have been revised upwards, with both years expected to see inflation at around 0.8%. Growth forecasts for these years remain largely unchanged, with 2026 growth projected to be between 1.5% and 2%, and 2027 growth pegged at 1.5%.

The SNB attributed the rise in inflation to higher energy prices, but noted that medium-term inflationary pressure has increased only slightly. The main risk to the economic outlook remains developments in the global economy, including potential further deterioration of the situation in the Middle East.