Chart of the day: EURCHF (25.09.2025)

• SNB keeps interest rate at 0%
• The SNB remains ready to intervene in the foreign exchange market if needed; no plans to reinstate a minimum exchange rate.
• Inflationary pressure is essentially unchanged compared to Q2; the conditional forecast remains within the 0–2% price stability range.
• US tariffs are the main downside risk, weighing on Swiss exports/investments — especially machinery and watchmaking.
• No forward guidance; decisions are made quarterly. The threshold for negative rates is high, but rates could go below zero if medium-term inflation were to leave the target band.

The Swiss National Bank left its policy rate unchanged at 0%, marking a pause after a series of cuts since March 2024. Sight deposits will continue to be remunerated at 0% up to set thresholds, with amounts above that subject to a 0.25 percentage point discount. Policymakers emphasized readiness to act in FX markets if needed but ruled out a return to a minimum exchange rate, noting today’s context differs from 2011.

On prices, the SNB assessed that inflationary pressures are broadly unchanged from the previous quarter. Headline inflation rose from -0.1% in May to 0.2% in August, driven mainly by tourism and imported goods. The conditional inflation path — assuming the policy rate stays at 0% throughout the horizon — remains within the 0–2% stability band, averaging 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027. Accordingly, policy remains accommodative but consistent with price stability.

The Bank still expects Swiss GDP growth of 1–1.5% in 2025, just under 1% in 2026, and further increases in unemployment. Export-oriented sectors such as machinery and watchmaking are most affected by tariffs, while services appear more resilient for now.

Press conference

President Martin Schlegel stressed the high bar for returning to negative rates: the SNB would only consider policy rates below zero if medium-term inflation moved outside the price stability band. He reiterated the lack of forward guidance — policy is set quarterly — and noted that the SNB is “not constrained” in its ability to intervene in FX markets whenever deemed appropriate.

EURCHF was essentially unchanged after the decision, which was largely priced in. The pair showed somewhat higher volatility than usual, though not significantly above the average for such events.