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2026-03-19 09:30
The Swiss National Bank decided to maintain a zero interest rate, which did not surprise market participants at all. However, the Swiss announced that their readiness to intervene on the currency market has increased.
The monetary policy rate of the Swiss National Bank remained unchanged at 0.00% – which is currently the lowest level in the world. This decision was in line with the market consensus, which did not assume a drop in interest rates in Switzerland below zero. In a Reuters poll, only one of the 29 economists surveyed believed in introducing a negative interest rate for the franc.
– The SNB is not willing to introduce negative interest rates at this stage because the bar is set higher than in 2015. We still expect that the SNB will keep rates unchanged for the foreseeable future – this is what Nikolay Markov, an economist at Pictet Asset Management, said even before the publication of the March SNB statement.
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The interest rate in Switzerland was reduced to zero in June last year and then left unchanged in September and December. This marked the end of the Helvetii's cycle of monetary easing. Easing of monetary policy in Switzerland, the cycle of reductions that started in March 2024. From then until June, the SNB reduced rates at each of its decision-making meetings: in September and in June, when the SNB did not surprise the market and cut it by 25 bp.
– Taking into account the conflict in the Middle East, the SNB's readiness to intervene in the currency market has increased. Hence The SNB will counter the sudden and excessive appreciation of the Swiss franc – we read in the SNB's March announcement.
The Helvetii reset both rates and inflation to zero
In December 2025, CPI inflation in Switzerland amounted to 0.1% per annum (and 0.0% m/m). Also in January and February, the result remained at the level of 0.1% y/y. Virtually zero consumer inflation in this Alpine country has been maintained since the beginning of 2025. Moreover, even such low inflation is unlikely to keep the Swiss central banker awake at night, as the SNB's inflation target is in the range of 0-2%. This is different from most central banks of developed countries, where the inflation target is usually 2% (e.g. in the USA, Japan, the euro zone, Great Britain).
Switzerland is therefore the only developed economy that managed to avoid a prolonged period of increased price inflation in 2021-2023. For only 16 months, Swiss inflation exceeded 2%, peaking at 3.5% in August 2022. At that time, it was the highest reading in almost 30 years. But CPI inflation in Switzerland has been within the range desired by the central bank for 30 months now.
The SNB's March projection assumes that this year the average annual CPI inflation will amount to 0.5%, will remain at the same level in 2027 and will increase to 0.6% in 2028. These readings would still be significantly lower than in the USA or the euro zone, but would also be within the Swiss inflation target. This projection is based on the assumption of maintaining zero interest rates throughout the forecast horizon.
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