Swiss National Bank (SNB) Chairman Martin Schlegel spoke in an interview on Monday, saying that while the Bank does not favour negative interest rates, it cannot completely rule them out:
- “The SNB doesn’t like negative interest rates, at the same time we can’t rule negative interest rates out,” he told broadcaster SRF.
- “Not something the SNB would do lightly.”
In recent weeks, Schlegel has frequently mentioned the possibility of negative rates, particularly as Swiss inflation has declined to 0.6% in December, raising concerns about deflation.
- “It is possible that will be individual months with negative inflation, but that is not a problem,”
- reiterated the SNB focus on maintaining price stability in the “mid term” within its 0 – 2% target range.
Market expectations currently centre or around a 60% probability of a rate cut from 0.5% to 0.25% in March, with a 25% or so chance of rates reaching 0% by June.
Swiss National Bank
The next SNB interest rate decision will take place on Thursday, March 20, 2025 at 8:30 AM GMT