Why Switzerland Keeps Rates at Zero Despite Rising Inflation Risks

Switzerland’s central bank has kept its main interest rate at zero for more than a year.

It can do this because prices in Switzerland are rising only slowly.

Inflation was 0.8% in August, which is inside the bank’s preferred range.

The Swiss franc can also become stronger when people worry about the world economy.

A stronger franc makes goods bought from other countries cheaper.

Recently, however, the franc has weakened and oil prices have increased.

These changes could make prices rise faster in Switzerland.

The central bank may raise rates if inflation risks grow.

Markets think a rate increase could happen by early 2027.