Swiss central bank urged to tread carefully over tariffs

The SNB is walking a tightrope over tariffs and inflation Keystone / Peter Klaunzer

The Swiss National Bank (SNB) shouldn’t seek to soften the impact of United States tariffs through monetary-policy channels, according to a group of economists.

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Swiss exporters are currently in a double bind, enduring the 39% levy imposed this month as well as a strong franc that’s appreciated by about 10% against the dollar since President Donald Trump’s initial trade announcements in April.

While the SNB could move to help them by either reducing interest rates or weakening the currency through interventions, both responses bear costs, uncertainties and risks, according to the SNB Observatory — a group of academics usually critical of the central bank.

They urge it not to shift policy specifically to ease pain from the surcharges.

“Any policy intervention would carry inflationary risks and invite renewed accusations of currency manipulation,” the group said Tuesday in a report. “In practice, the SNB can do little that would be effective in mitigating the effects of the tariff without creating other problems.”

The Swiss economy is proving resilient so far, while a minority of forecasters expects the central bank to cut borrowing costs below zero in the second half of 2025, with inflation currently just 0.2%. Other analysts predict firms will increasingly look to the SNB for help if the high tariff rate stays in effect for an extended period.

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