Swiss National Bank Holds Interest Rate at Zero

The Swiss National Bank kept its key interest rate at 0% on Thursday, maintaining a different policy course from several major central banks that have raised rates in response to inflation.

SNB Chairman Martin Schlegel said the decision reflected Switzerland’s inflation outlook. Annual inflation rose to 0.8% in August, driven in part by higher gasoline, diesel and heating-oil costs, but remained within the SNB’s 0%-to-2% price-stability range. Schlegel said inflation pressure was slightly higher than in June, according to Newsquawk.

The SNB expects inflation to rise somewhat in the fourth quarter before declining during 2027 as elevated energy inflation eases. Its forecasts put average annual inflation at 0.7% in 2026 and 0.8% in both 2027 and 2028. Schlegel said uncertainty remained high and that a weaker Swiss franc was also affecting the outlook.

The franc’s strength has helped restrain inflation by making imports cheaper, though rapid appreciation can weigh on prices and economic activity. The currency gained more than 12% against the dollar in 2025, while the dollar has recovered about 4% against it this year. Schlegel said the SNB had indicated in early March that it had an increased willingness to intervene in foreign-exchange markets.

Markets continue to anticipate eventual tightening. CNBC reported that traders saw roughly even odds of a rate increase in December and more than a 90% probability of a first increase by early 2027.