SNB Policy Setup Means Big FX Interventions Unlikely, UBS Says

(Bloomberg) — Large-scale interventions in the franc by the Swiss National Bank are unlikely even though the currency’s strength pushed interest rates to zero, according to economists at UBS.

“The way how the policy rate is implemented is not adapted for persistent foreign currency purchases,” Maxime Botteron, Florian Germanier and Alessandro Bee said in note after the SNB’s rate decision on Thursday. “Systematic foreign currency purchases are unlikely at this stage.”

The analysts referred to the central bank’s system of implementing its monetary policy, which is different from the one it used when it last made big FX purchases, during the 2015-2022 period of negative rates. The current setup means the SNB would be required to sterilize its purchases in withdrawing franc liquidity, they said.

Still, “opportunistic interventions remain possible,” according to the note. 

The SNB is scheduled to disclose on June 30 how much it intervened in the first quarter of this year. Data for 2024 showed that it didn’t step into currency markets in a meaningful way.

The UBS economists expect the SNB to stay at 0% rates for the next 12 months, though they acknowledged that downside risks to growth and inflation “could trigger further action.”

©2025 Bloomberg L.P.