Schlegel Says SNB Won’t Hesitate to Cut Rate Again If Needed

(Bloomberg) — The Swiss National Bank won’t shirk from cutting borrowing costs below zero if such a move is really called for, President Martin Schlegel said.

Just two weeks before a quarterly decision where officials will determine whether to keep their interest rate at the current level of zero, the central bank chief insisted that he and his colleagues are prepared to revert to the policy stance they exited three years ago.

“If it’s really necessary, we won’t hesitate,” Schlegel told an audience of bankers at an event in Vezia, near Lugano in southern Switzerland.

Officials including the SNB president have said that the bar to a reduction is higher than that applied to other moves, given the adverse impacts that such a policy can have on pensions and the financial system.

A majority of economists forecast that policymakers will keep their rate unchanged at the Sept. 25 decision, while a minority predicts a quarter-point cut to -0.25%.

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