On June 18, 2026, the Swiss National Bank (SNB) announced it would maintain its main policy rate at 0%, a decision anticipated by the market. Chairman Martin Schlegel noted that the recent Middle East conflict had initially increased demand for the Swiss franc as a safe haven, but this pressure has since subsided.
However, the SNB remains vigilant and is ready to act against any rapid appreciation of the franc that could threaten economic stability. Inflation in Switzerland has risen to 0.6% in May from 0.1% in February, driven by higher energy prices linked to the Iran conflict, although it remains low compared to global standards.
Schlegel emphasized the importance of monitoring the geopolitical landscape, as the risk of upward pressure on the franc persists due to widening interest rate differentials with other countries. The European Central Bank has recently raised its key interest rate, and the Federal Reserve has signaled potential rate hikes, which could further impact currency dynamics.
The SNB projects Swiss economic growth at around 1% in 2026 and 1.5% in 2027, but it cautioned that global economic conditions, particularly U.S. trade policy and Middle East uncertainties, pose significant risks.
The SNB's willingness to intervene in the foreign exchange market could provoke tensions with the U.S., which has previously accused Switzerland of currency manipulation, leading to high tariffs. This situation underscores the delicate balance the SNB must maintain in its monetary policy amidst external pressures