The Swiss National Bank can further reduce its interest rates and even bring them below 0% if Swiss inflation is too low, President Martin Schlegel said on Wednesday, although he could not specify the likelihood of such a measure.
“At the moment we are at 0.5%,” Schlegel told Reuters at the World Economic Forum in Davos, Switzerland. “This means we still have some room for maneuver.
“In Switzerland, no one likes negative interest rates. The Swiss National Bank doesn’t like negative interest rates either. But if we have to do it, we will do it again,” he added. .
The SNB applied negative interest rates for almost eight years starting in December 2014, but abandoned the policy to combat the resurgence of inflation after the bird flu pandemic.
Price increases have slowed in recent months, with Swiss inflation remaining within the SNB’s 0-2% target range since June 2023 and easing to 0.6% in January.
-The SNB responded by cutting interest rates from 1% to 0.5% in December, its biggest reduction in more than a decade, and markets expect further cuts this year.
Mr Schlegel said the central bank would see whether further adjustments are needed at its next meeting in March.
“For now, monetary conditions are appropriate, we decide from quarter to quarter and then we will see,” he said, adding that he could not give a probability that rates would turn negative .
Swiss
