| RAMZI CHAMAT | OAKS GROUP
In a tense geopolitical climate marked by growing economic uncertainty, the Swiss National Bank (SNB) has opted for stability. While major global powers adjust their monetary policies in response to inflationary pressures or trade tensions, the SNB stays the course, remaining true to its cautious strategy.
On Thursday, September 25, 2025, the SNB decided to keep its key interest rate unchanged at 0%, a historically low level among major central banks worldwide. This widely anticipated decision comes as Switzerland faces a new economic challenge: the recent introduction by the United States of 39% tariffs on Swiss exports. While growth forecasts have been revised downward, the stability of the Swiss franc and the return of inflation within the target range supported the SNB’s decision to hold steady.
The Swiss National Bank announced that it would maintain its key interest rate at 0%, confirming expectations from both markets and economists. This rate, the lowest among major central banks, has remained unchanged since a series of cuts that began in March 2024 and brought the rate down to 0.0% on June 19.
The Swiss franc's stability against the euro, along with the gradual return of inflation within the SNB's target range of 0% to 2%, were key factors in this decision. According to GianLuigi Mandruzzato, economist at EFG Bank, the move "reflects the return of inflation to the target range, the hope that it will stabilize near the midpoint in the coming years, and expectations for moderate growth in the Swiss economy."
In its statement, the SNB emphasized that “inflationary pressure has changed little since the second quarter. Monetary policy continues to help keep inflation within the price stability range and supports economic activity.”
After dipping into negative territory in May, inflation has remained within the SNB’s target range for the past three months. Martin Schlegel, president of the SNB, stated that several factors argue against a return to negative interest rates, a policy that had sparked widespread criticism between 2014 and 2022, particularly among savers and pension funds.
Nonetheless, the SNB reaffirmed its vigilance: “It will continue to monitor the situation and, if necessary, adjust its monetary policy to ensure price stability.”
The SNB’s announcement comes against a backdrop of escalating trade tensions. Since August, the United States has imposed 39% tariffs on Swiss goods, particularly affecting products from the watchmaking and machinery industries. This decision, signed by President Donald Trump, directly threatens a key pillar of Switzerland’s export-oriented economy.
Initial SNB estimates indicate a significant impact on growth. The central bank now expects GDP growth to fall slightly below 1% in 2026, alongside a gradual rise in unemployment.
The SNB’s decision to maintain its key interest rate at 0% reflects its commitment to preserving monetary stability while retaining room for manoeuvre in an unpredictable global environment. With inflation under control, a stable franc, and economic prospects clouded by trade tensions, the institution favors a strategy of close observation. Should growth deteriorate further, the SNB stands ready to act. For now, it is banking on the resilience of the Swiss economy and the strength of its monetary framework.
