Swiss National Bank Holds Interest Rates at 0% as Inflation Hits Zero

The Swiss National Bank (SNB) kept its key interest rate unchanged at 0%, reinforcing its view that current monetary policy continues to support economic growth while keeping inflation firmly within the country’s price-stability range.

The decision reflects a blend of cautious optimism, following the recent resolution of tariff disputes with the United States, and lingering concerns about a weakening global economy.

The SNB said the 0% policy rate remains “expansionary,” sustaining economic activity and anchoring inflation between its targeted band of 0% to 2%.

Annual inflation fell to 0% in November, brushing the lower threshold of Switzerland’s definition of price stability.

Despite the softer-than-expected reading, the bank noted that medium-term inflation pressures “have not materially shifted.”

SNB Chairman Martin Schlegel said the current stance would help guide inflation gradually higher over the coming quarters.

Slight Downgrades to Long-Term ForecastsThe central bank trimmed its inflation forecasts for 2026 and 2027 to an average of 0.3% and 0.6%, down from earlier estimates of 0.5% and 0.7%.

The projection for 2025 remains unchanged at 0.2%.

Economists say the forecast trajectory, staying modestly above zero, reduces the likelihood of a return to negative interest rates. Most analysts expect the SNB to keep rates at 0% throughout 2026, with only a slim chance of tightening in early 2027.

In a brief statement, the SNB highlighted that the newly reached agreement with the United States on reduced tariffs has “slightly improved” Switzerland’s economic outlook.

Lower duties and a better international mood, it said, have helped support sentiment across export-heavy industries.

Still, the bank stressed that the largest risk to Switzerland’s economy remains the trajectory of global growth.

The SNB expects GDP growth of around 1.5% in 2025 and approximately 1% in 2026, signaling soft external demand as a drag on one of the world’s most open economies.

A modest increase in unemployment is also projected over the next two years.

Switzerland has maintained a stable monetary policy since exiting negative interest rates, benefiting from a strong franc and inflation levels far below those seen across much of Europe.

With global uncertainty still elevated, the SNB appears set to prioritize caution and gradualism to preserve stability in the small but highly globally integrated economy.