The Swiss National Bank (SNB) has lowered its key interest rate to 0%, citing declining inflation, a stronger Swiss franc, and global economic uncertainty driven by U.S. trade policies.
This is the sixth rate cut since March 2024, reducing the benchmark from 0.25%, following Switzerland’s inflation turning negative in May for the first time in four years—below the SNB’s 0–2% target.
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The SNB said the cut was necessary to address weakening inflation pressures and signaled the possibility of reintroducing negative rates if economic conditions deteriorate. However, Chairman Martin Schlegel stressed such a step wouldn’t be taken lightly due to its impact on savers and pension funds.
Future rate decisions will hinge on global economic developments, with the next review set for September. Analysts pointed to the franc’s 11% rise against the U.S. dollar in 2025 as a major factor, easing import costs and inflation but risking harm to Swiss exporters.
The SNB also warned of broader risks from escalating global trade tensions following new U.S. tariffs. While prepared to intervene in currency markets, the SNB remains cautious to avoid being branded a currency manipulator.
With this cut, Switzerland joins other central banks—including Norway and the ECB—in easing rates amid slowing global growth.
