MNI BRIEF: SNB Cuts Key Policy Rate To Zero

The Swiss National Bank cut its key policy rate by 25 basis points to 0% on Thursday, as inflationary pressures across the economy decreased compared to the previous quarter. (See MNI SNB WATCH: Back To Zero As Inflation Turns Negative )

The SNB's Board said it will "continue monitoring the situation closely and adjust its monetary policy if necessary, to ensure  that inflation remains within the range consistent with price stability over the medium term." Inflation has declined further since the last monetary policy assessment, slowing from 0.3% in February year-on-year to −0.1% in May. 

However, there was little change in the SNB's medium term projections, and inflation sits within the range of price stability over the entire forecast horizon, putting average annual inflation at 0.2% for 2025, 0.5% for 2026 and 0.7% for 2027 (cf. table). According to the SNB, the forecast is based on the assumption that the policy rate is 0% over the entire forecast horizon and without the latest rate cut, the forecast would have been lower.