SNB leaves policy rate unchanged at -0.75% as expected

• SNB left its policy rate unchanged in March as widely expected.
• USD/CHF continues to trade in positive territory above 0.9300.

The Swiss National Bank (SNB) announced on Thursday that it left the interest rate on sight deposits unchanged at -0.75% as expected. In its policy statement, the SNB reiterated it remains willing to intervene in the foreign exchange market as necessary to counter the upward pressure on the Swiss franc.

Additional takeaways

"In so doing, it takes the overall currency situation and the inflation rate differential with other countries into consideration."

"The Swiss franc remains highly valued."

"Russia’s invasion of Ukraine has led to a strong increase in uncertainty worldwide."

"Against this backdrop, the SNB with its monetary policy is ensuring price stability and supporting the Swiss economy."

"Difficult to assess the future course of the war and its economic impact."

"The risks to growth are considerable and to the downside."

"Will continue to monitor developments on the mortgage and real estate markets closely."

"A further escalation of the war and a widening of the sanctions could weigh more heavily on economic activity worldwide and in Switzerland than assumed in the baseline scenario."

"Renewed deterioration in the pandemic situation cannot be ruled out."

"A worsening in the tight supply of raw materials could lead to a further rise in inflation globally."

Market reaction

The USD/CHF pair showed no immediate reaction to the SNB's policy announcements and was last seen rising 0.3% on the day at 0.9335.