SNB holds rates but strengthens intervention stance, aiming to cap CHF gains as energy-driven inflation rises only temporarily. The central bank kept its policy rate unchanged at 0.00%, as widely expected, but sharpened its language on foreign exchange intervention amid heightened global uncertainty.
The key shift lies in the SNB’s explicit acknowledgment that its “willingness to intervene… has increased,” in the context of escalating tensions in the Middle East. With safe haven demand likely to support the Swiss Franc, the SNB is signaling a readiness to act more forcefully to prevent excessive appreciation that could tighten financial conditions and undermine price stability.
Inflation projections reflect the temporary nature of the current energy shock. While short-term inflation is now expected to rise more strongly due to higher oil prices, medium-term pressures remain largely unchanged. The SNB continues to see inflation well within its price stability range, with forecasts at just 0.5% for both 2026 and 2027, and 0.6% for 2028.
On the growth side, the outlook remains subdued in the near term, with GDP expected to expand around 1% in 2026 before improving to 1.5% in 2027. Risks are tilted to the downside, particularly from global developments and the ongoing Middle East conflict. Taken together, the policy stance reinforces that the SNB’s primary focus remains on managing currency strength rather than responding to short-lived inflation pressures.
