LowIV Macro Policy & Sovereign Debt24 September 2026, Thursday
Swiss National Bank holds rate at 0%, raises 2027 inflation forecast from 0.6% to 0.8%; franc weakens as intervention language softens
The SNB left its policy rate at 0% on 24 September and raised its inflation forecasts to 0.7% for 2026 and 0.8% for 2027 and 2028 on the back of higher petroleum product prices. When it dropped the phrase 'increased willingness' on currency intervention, EUR/CHF rose from 0.9380 to 0.9420.
According to the Swiss National Bank's monetary policy assessment of 24 September, the policy rate remained at 0% and the 0.25-point discount applied to sight deposits above the threshold was maintained. The bank wrote that inflation rose from 0.6% in May to 0.8% in August and that the increase came mainly from petroleum product prices. The conditional inflation forecast is 0.7% for 2026 and 0.8% for 2027 and 2028; growth is expected at 1.5–2% for 2026 and around 1.5% for 2027. The main risk cited was that the situation in the Middle East could slow the global economy more sharply.
According to investingLive, the previous assessment's forecasts were 0.6% for 2026, 0.6% for 2027 and 0.7% for 2028; the 2026 growth expectation was raised from 1%. On the currency market, the bank replaced 'increased willingness' with 'willing to be active as necessary'; after the decision EUR/CHF rose from 0.9380 to 0.9420, and the franc has lost around 3% against the euro since early June. According to Global Banking and Finance, on the same day Norway raised its rate to 4.50% while Sweden held at 1.75% and signalled a hike by the end of the year; SNB Chairman Schlegel said medium-term inflationary pressure had increased only slightly.
Talay assessment
Bottom line
The SNB judges that the energy shock has been contained at 0.8% inflation in Switzerland and that a weaker franc supports the economy; it is therefore staying away from both a hike and negative rates. The softer intervention language signals reduced concern about franc overvaluation. The most likely path is that the rate stays at 0% in December as well.
Likely effects
- FrancUncertainWeeks
Softer intervention language and hikes by other central banks are widening the rate differential against the franc; EUR/CHF moving above 0.94 reflects this.
- Swiss inflationPositive1–6 months
Forecasts holding at 0.8% through 2028 show that the energy shock is not straining price stability in Switzerland and that its impact is seen as temporary.
- Safe-haven flowsNegativeWeeks
The franc's roughly 3% depreciation against the euro since early June may signal a weakening of its classic safe-haven role during global stress; price competitiveness of Türkiye's gold and goods exports to Switzerland is affected.
Possibilities, ranked
- 10% in December too65%
Inflation stays below 1% and the SNB leaves the rate unchanged at its December meeting.
Watch: Swiss CPI data for September and October
- 2Surprise hike20%
If oil stays high and the franc keeps weakening, inflation exceeds 1% and the SNB raises by 25 basis points in December.
Watch: EUR/CHF rising above 0.96 and CPI moving above 1%
- 3Renewed intervention15%
If the franc appreciates rapidly in a global risk-off move, the SNB steps up foreign currency purchases.
Watch: SNB quarterly foreign exchange intervention data
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- SNB policy rate▲ 0% (unchanged)
- 2027 inflation forecast▲ 0.8% (prev. 0.6%)
- EUR/CHF▲ 0.9380→0.9420