Swiss Interest Rate Remains at Zero Amid Economic Slowdown and Low Inflation

Swiss interest rate policy remained unchanged as the Swiss National Bank decided to keep its key rate at 0% for the second consecutive time, reflecting a cautious stance amid slowing economic activity and subdued inflation.

This level remains the lowest among major central banks.

The decision to maintain the Swiss interest rate at zero comes as Switzerland’s economy showed signs of weakness, with a contraction recorded in the third quarter and inflation falling to 0% in November, the lower bound of the central bank’s target range.

The central bank noted that recent inflation readings were slightly below expectations, while medium-term price pressures have not changed significantly compared with its previous assessment.

A strong Swiss franc and lower import costs continue to limit inflationary pressures.

On the trade front, a recent Swiss–US agreement to reduce additional tariffs on Swiss goods has provided limited support to the economic outlook.

The central bank believes this development, alongside modest improvements in the global environment, has helped stabilize prospects without reversing the broader slowdown.

Key sectors such as luxury watches, machinery, and chocolate are expected to benefit from lower tariffs, easing some of the pressure they faced earlier.

Nevertheless, the Swiss interest rate remains a central tool to support economic balance during this period.

Looking ahead, the Swiss National Bank slightly revised its inflation forecasts downward but still expects a gradual increase over the coming years, reaching moderate levels by 2027, while remaining within the price stability range.