Archive · 28 Sep 2026
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.
The Swiss National Bank kept its key interest rate at 0% on September 24.
Swiss inflation was 0.8% in August, within the bank’s 0–2% target range.
A strong Swiss franc has helped make imports cheaper and limit inflation.
The franc has weakened recently while oil prices have risen, increasing future inflation risks.
Markets see roughly even odds of a December hike and over 90% odds of a hike by early 2027.
- Who
- The Swiss National Bank, Switzerland’s central bank.
- What
- It kept its key interest rate unchanged at 0%.
- When
- The decision was made on September 24, after the rate had remained unchanged since June 2025.
- Where
- Switzerland.
- Why
- Inflation remains low, and the Swiss franc has helped restrain imported-price increases, although a weaker franc and higher oil prices pose new risks.
- Policy rate
- 0%
- August inflation
- 0.8%
- Inflation target
- 0% to 2%
- Forecast average inflation
- 0.7% in 2026 and 0.8% in 2027 and 2028
- United States policy rate
- 3.75% to 4%
- European Central Bank policy rate
- 2.50%
- Expected market timing
- Markets priced in roughly even odds of a December hike and more than 90% odds of a first hike by early 2027