Switzerland’s central bank kept its policy rate unchanged as higher energy costs lifted near-term inflation, but officials judged medium-term price pressure to be only slightly stronger and still consistent with price stability.
- Policy rate: The Swiss National Bank left its policy rate unchanged at 0% on 24 September, in line with economist and market expectations.
- Inflation: Swiss inflation rose from 0.6% in May to 0.8% in August, mainly because of higher prices for oil products.
- Forecast: The SNB projects average inflation of 0.7% in 2026 and 0.8% in both 2027 and 2028, assuming the policy rate remains at 0%.
- Market reaction: The franc weakened after the decision, while the yield on two-year Swiss government debt fell by nearly 4 basis points on the day.
- Market connection: The decision is relevant to CHF currency pairs, Swiss rate expectations and broader comparisons between major central-bank policy paths.
The Swiss National Bank left its policy rate at 0% at its September monetary policy assessment, extending the zero-rate setting that has been in place since June 2025. The decision came as several other major central banks have moved toward tighter policy in response to renewed inflation pressure from higher energy costs.
The SNB acknowledged that inflation has risen since its June assessment, but said medium-term inflationary pressure had increased only slightly. In its assessment, current monetary policy remains appropriate to keep inflation within the range it defines as price stability while also supporting economic activity.
That distinction is important. The recent increase in Swiss inflation has been concentrated in goods, particularly oil products, rather than reflecting a broad acceleration across the economy. Headline inflation reached 0.8% in August, still comfortably inside the SNB’s 0% to 2% price-stability range.
The SNB expects inflation to increase somewhat further during the fourth quarter before declining over the course of 2027. Its conditional forecast puts average annual inflation at 0.7% in 2026, 0.8% in 2027 and 0.8% in 2028, based on an unchanged 0% policy rate throughout the forecast horizon.
The near-term forecast is higher than in June because oil-product prices have been stronger than expected. The SNB also noted that a weaker Swiss franc has contributed to a modest increase in its medium-term inflation projection. Even so, the full forecast remains within the range the central bank associates with price stability.
This gives Switzerland a different policy backdrop from economies where energy inflation is feeding more strongly into broader prices. Reuters noted that Norway raised rates on the same day and Sweden’s Riksbank signalled that a rate increase could follow before year-end, while the Federal Reserve and European Central Bank have also tightened policy this month.
The policy decision also arrived against a firmer domestic growth backdrop. The SNB now expects Swiss economic growth of between 1.5% and 2% in 2026 and around 1.5% in 2027. Separately, Switzerland’s State Secretariat for Economic Affairs recently raised its 2026 growth forecast to 1.7% from 0.9%, following unusually strong second-quarter growth.
However, both institutions continue to flag risks. The SNB expects moderate growth over the coming quarters and points to the global economy, the Middle East conflict, trade-policy uncertainty and exchange-rate developments as important sources of uncertainty. SECO has similarly warned that high energy prices and trade uncertainty could weigh on the outlook.
The combination of contained inflation and moderate growth helps explain why the SNB can maintain a different policy stance from several of its peers without treating the latest rise in energy costs as evidence of a broad domestic inflation problem.
Foreign-exchange and bond markets reacted to the SNB’s comparatively moderate message. Reuters reported that the US dollar rose against the franc after the decision, with USD/CHF reaching its highest level since May 2025 during Thursday’s session. The yield on two-year Swiss government debt fell by nearly 4 basis points after the announcement.
The SNB also adjusted its wording on currency intervention. It said it remains willing to be active in the foreign-exchange market as necessary to ensure appropriate monetary conditions. Earlier language had emphasised an increased willingness to counter excessive franc appreciation, reflecting the currency’s safe-haven strength during periods of heightened geopolitical uncertainty.
For markets, the important issue is therefore not only the level of the policy rate, but also how the SNB assesses the franc, imported inflation and the policy gap between Switzerland and other major economies. Changes in those relative expectations can influence CHF pairs even when the SNB itself leaves rates unchanged.
- Swiss inflation data for signs that higher energy costs are spreading beyond fuel-related categories.
- USD/CHF and EUR/CHF as markets reassess the policy-rate gap between Switzerland and other major economies.
- SNB communication on foreign-exchange intervention and any renewed safe-haven demand for the franc.
- Swiss government-bond yields and market expectations for the timing of any future rate increase.
- Domestic growth indicators after the strong second quarter and the upgraded 2026 outlook.
- Global energy prices and geopolitical developments that could change the inflation path.
For instrument context, ICM.com’s Forex market page lists CHF currency pairs including EUR/CHF, CHF/JPY and CAD/CHF. Product availability and specifications can change, so current contract details should be checked separately.
The central bank judged that medium-term inflationary pressure had increased only slightly and that current policy remained consistent with price stability. Headline inflation was 0.8% in August, inside the SNB’s 0% to 2% price-stability range.
Inflation has risen from earlier in the year, mainly because of higher oil-product prices. The SNB expects a further near-term increase before inflation eases during 2027.
The SNB’s decision and relatively moderate inflation message reinforced the contrast with central banks that are raising rates. Relative interest-rate expectations are one factor that can affect currency demand, although exchange rates also respond to broader market and geopolitical conditions.
Yes. The September decision does not pre-commit future policy. The SNB will continue to assess inflation, growth, the exchange rate and global conditions at future meetings.
