Swiss National Bank maintains 0% interest rate amid rising inflation

The Swiss National Bank (SNB) has decided to maintain its policy rate at 0%, citing inflation levels that remain within its target range of 0% to 2%. Despite the zero-percent benchmark, fixed-rate mortgage interest rates in Switzerland have been rising, driven by market expectations of future rate hikes rather than current central bank policy. For example, 10-year fixed mortgages have seen increases of approximately 0.43 percentage points since March.

Inflation forecasts have been revised upward, with projections reaching 0.7% for 2026 and 0.8% for 2027 and 2028, largely due to rising energy costs. The SNB also noted a depreciation of the Swiss franc and remains prepared to intervene in foreign-exchange markets to maintain appropriate monetary conditions.

In the broader economy, the Swiss Market Index (SMI) recently climbed back above the 14,000-point mark. Meanwhile, the real estate sector shows continued confidence according to the KPMG Swiss Real Estate Sentiment Index, although price growth expectations have moderated compared to previous record highs.