Schlegel: SNB prepared for franc appreciation

Swiss National Bank Chairman Martin Schlegel outlined the SNB's recent monetary policy, detailing a significant easing cycle.

After successfully countering post-pandemic inflationary pressure, the SNB reduced its policy rate from 1.75 percent to 0.5 percent in 2024.

Further cuts in March and June 2025 brought the rate to zero.

Schlegel noted that medium-term inflationary pressure has since remained stable, leading to no further adjustments in the last three policy assessments.

The current expansionary policy operates through low interest rates, which make loans cheaper, stimulate investment, and support economic growth.

This is reflected in increased lending.

Additionally, lower interest rates reduce the Swiss franc's attractiveness, thereby dampening appreciation pressure.

Schlegel affirmed the SNB's willingness to intervene in the foreign exchange market by purchasing foreign currency if needed to counter rapid franc appreciation, ensuring price stability while considering broader economic developments.

Schlegel outlined three core prerequisites for the SNB's successful monetary policy: a solid institutional framework, a robust strategy, and expert staff.

He stressed the SNB's independence, legally and socially anchored in Switzerland, which enables a singular focus on price stability, free from external instructions.

This independence is balanced by a duty of accountability, with the SNB transparently explaining its actions to the public and political bodies.

The SNB's robust monetary policy strategy defines price stability as 0-2 percent annual inflation over the medium term, with the conditional inflation forecast as its main indicator.

This strategy is regularly reviewed.

Finally, expert employees are crucial for assessing complex information and making well-founded policy decisions, forming the basis for good policy.