SNB Set to Hold Rates as Low Inflation Continues

Nomura analysts Anderson, Buckley, and Szczepaniak expect the Swiss National Bank (SNB) to keep its 0.00% policy rate unchanged for the foreseeable future.

This is due to low inflation below 1%, with the neutral rate estimated at around 0%. They point out that structural factors in Switzerland's energy mix, including a reliance on hydropower and nuclear power, have contributed to this situation.

The analysts also highlight Swiss Franc (CHF) strength as another reason for the low inflation and policy rate. However, they expect the SNB to diverge from the European Central Bank (ECB), where they forecast a further rate hike.