The Swiss National Bank’s March meeting minutes highlight the growing influence of global risks on domestic policy, with the Middle East conflict identified as a key driver of uncertainty. Policymakers noted that the war could weigh more heavily on global activity while intensifying upward pressure on the Swiss Franc through safe-haven demand.
This dynamic was already evident in early March, when Franc climbed to an 11-year high against Euro as investors sought safety. Such strength presents a dilemma for the SNB, as it risks tightening monetary conditions and pushing inflation lower, complicating efforts to maintain price stability.
In response, the SNB reiterated that it stands ready to intervene in foreign exchange markets if needed. Although the policy rate was left unchanged at 0%, officials emphasized the “willingness to intervene in the foreign exchange market should remain high in order to counter a rapid and excessive appreciation of the Swiss Franc, which would jeopardise price stability in Switzerland”.
