By Anant Chandak and Indradip Ghosh
BENGALURU (Reuters) -The Swiss National Bank will hold its policy rate at zero on September 25 and throughout 2026 due to inflation remaining on target and the currency holding steady, according to a majority of economists in a Reuters poll.
With the SNB already having the lowest interest rate among major central banks and inflation gradually picking up – although remaining very low – the bar is high for rates to go negative, as they were from December 2014 until September 2022.
Earlier this month, SNB Chairman Martin Schlegel shared a similar view, citing “undesirable side effects” of negative rates. Meanwhile, a steady franc may provide additional comfort to the central bank, especially when the ECB is widely expected to be done with cutting rates.
The SNB will keep its main policy rate at 0.00% on September 25, its first pause since December 2023, according to all but one of 41 economists in the September 17-22 Reuters poll. One expected a cut to -0.25%.
“We updated our view and now expect a policy rate hold, rather than one more cut, after inflation printed above our forecasts over the summer,” said Josie Anderson, European economist at Nomura.
“In addition, hawkishness from the ECB at recent meetings suggests the ECB is unlikely to cut its policy rate again for the foreseeable future, limiting the prospect of CHF appreciation.”
Last week, the U.S. Federal Reserve delivered its first cut since December, while the ECB kept its deposit rate unchanged for the second consecutive meeting on September 11.
The franc has only gained around 0.4% against the euro since the start of this year and is expected to lose more than 2% over the coming 12 months, according to a separate Reuters survey.
Meanwhile, inflation, which was at 0.2% last month and remained well within the central bank’s target range of 0%-2%, is expected to average just 0.2% this year and 0.6% in 2026.
More than 80% of economists – 30 of 36 – now expect rates to remain on hold for the rest of the year, a bigger majority than two-thirds in a June survey.
A strong majority – 21 of 25 – predicted the rate would still be at 0.00% at the end of 2026.
“We expect the SNB to remain on hold for the foreseeable future as domestic inflation has stabilised at low levels while at the same time economic activity remains resilient,” said Nikolay Markov, lead economist at Pictet Asset Management.
“Also, the SNB still has leeway to intervene in the foreign currency market as needed in the event of further CHF appreciation – a policy option that should be preferred by the Governing Board compared to introducing negative rates.”
The export-dependent economy, which grew 1.2% annually last quarter – the slowest pace since early 2024 – is already feeling the impact of 39% U.S. tariffs announced on August 1. It is likely to grow 1.2% this year and next, on average, poll medians showed.
(Other stories from the Reuters global economic poll)
(Reporting by Anant Chandak and Indradip Ghosh; Polling by Jaiganesh Mahesh and Sarupya Ganguly; Editing by Hugh Lawson)
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