SNB Chair Schlegel says doesn’t want negative interest rates, but “can’t rule them out”

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.

The next SNB interest rate decision will take place on Thursday, March 20, 2025 at 8:30 AM GMT

This article was written by Eamonn Sheridan at www.forexlive.com.