Swiss National Bank ‘ready to consider’ negative interest rates
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Swiss National Bank ‘ready to consider’ negative interest rates
The Swiss National Bank (SNB) is prepared to lower its key interest rate even further in the face of economic uncertainty, Chair Martin Schlegel said on Tuesday.
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No scenario has been ruled out by the Swiss central bank, he declared.
“If necessary, we are prepared to consider reintroducing a zero interest rate, or even a negative interest rate (monetary) policy,” Schlegel told the participants of a meeting in Zurich.
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He said the greatest risk currently facing the Swiss central bank is prevailing uncertainty on the markets, the volatility of which has exploded as a result of the recent trade war declared by Washington.
Meeting in mid-June
The uncertainties surrounding global growth, which are also likely to have repercussions for Switzerland, are having a particular impact on the Swiss franc, a safe-haven asset that has strengthened by almost 9% against the dollar since the start of the year.
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Against this backdrop, Schlegel stressed that the SNB was prepared to intervene on the foreign exchange market if necessary.
The SNB’s key interest rate is currently 0.25%, and most economists expect it to be cut to 0% at its monetary policy announcement in mid-June in response to the slowdown in inflation and the appreciation of the Swiss franc.
The Swiss central bank abandoned the negative interest rate zone in September 2022, when it raised its key rate from -0.25% to +0.50%.
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Translated from French by DeepL/sb
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