BERN: The Swiss National Bank (SNB) will probably lower its interest rate to zero this week and stay there for some time, according to a Bloomberg survey of economists.
Policymakers will reduce borrowing costs by a quarter point on Thursday, almost 80% of their predictions show. That would return the benchmark to the level it last crossed in September 2022, when seven years of negative rates ended.
This would be the first time ever it has landed on zero. Only three of the 22 forecasters – Pantheon Macroeconomics, Capital Economics and Swiss Life Asset management – reckon officials will go below that level this week, deploying a half-point cut to take the benchmark to negative 0.25%.
While another six including Goldman Sachs, Nomura and Barclays see a move there in September, the majority in the poll reckon the easing cycle will conclude in June.
Swiss officials can cite very weak consumer-price growth as a motivation for their sixth consecutive reduction: Last month, the inflation rate turned negative for the first time since early 2021.
Economists in the Bloomberg survey predict an annual average of just 0.3% this year and 0.6% in 2026.
Policymakers are acting to stem flows into the franc, which has gained more than 8% against the dollar after US President Donald Trump’s “Liberation Day” announcement of tariffs in early April.
The currency also appreciated against the euro since then, and its strength depresses import costs and consumer prices.
While SNB chief Martin Schlegel said in mid-May that officials have had productive talks with Washington on the central bank’s currency interventions, the US Treasury last week added Switzerland to a list of economies it is closely monitoring over exchange-rate policies. — Bloomberg
