SNB holds policy rate at 0%, signals franc depreciation and elevated inflation persistence
The Swiss National Bank maintained its policy rate at 0% on 24 September 2026, citing appropriate monetary conditions and only slight increases in medium-term inflationary pressure. The SNB acknowledged global inflation remains elevated and signaled willingness to intervene in FX markets; the Swiss franc has already depreciated against major trading partners.
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What happened
SNB kept policy rate at 0% on 24 September 2026. Swiss inflation rose from 0.6% (May) to 0.8% (August), driven by imported inflation and higher oil prices. SNB expects 2026 GDP growth of 1.5–2% and 2027 growth around 1.5%. Global growth exceeded expectations in Q2 2026 despite energy headwinds. Swiss franc depreciated against major trading partners' currencies since mid-June. Company surveys indicate robust Q3 activity, full construction order books, anticipated hiring, and wage growth expected at 1.3% in 2027 (down from 1.5% in 2026). Longer-term inflation expectations remained stable; short-term expectations declined slightly.
Why it matters
SNB's 0% hold and explicit FX intervention readiness reflect concern that imported inflation (oil-driven) and global price pressures persist despite modest Swiss domestic momentum. The franc's depreciation reduces Swiss export competitiveness headwinds but risks imported inflation acceleration. Wage moderation (1.3% vs 1.5%) and stable long-term expectations suggest inflation anchoring, but elevated global inflation and supply-chain friction (petroleum, electronics) create upside risks. SNB's acknowledgment of 'high uncertainty' (Middle East) signals caution despite robust near-term activity.
Market transmission
First-order: franc depreciation increases import costs (oil, components), offsetting SNB's accommodative stance and potentially sustaining inflation above target. Wage growth deceleration (1.5%→1.3%) eases second-order wage-price spiral risk. Second-order: if global inflation persists and oil prices remain elevated, SNB may face pressure to tighten despite domestic growth moderation; franc weakness could trigger capital outflows if rate differentials widen elsewhere. Equity and bond markets may reprice if global central banks tighten faster than SNB.
What to watch
Confirmation: further franc depreciation, oil price persistence, Q4 2026 inflation print above 1%, wage settlements exceeding 1.3% guidance. Invalidation: franc stabilization/appreciation, oil price decline, inflation expectations rising, SNB signaling rate-hike consideration. Monitor SNB's next policy decision (December 2026) and any FX intervention announcements; track CHF/EUR, CHF/USD, and Swiss CPI monthly prints.
Source:Swiss National Bank — Monetary policy
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