SNB continues to consider negative interest rates – However, the likelihood is decreasing

The Swiss National Bank (SNB) is keeping the option of negative interest rates in view, as explained by Martin Schlegel, the Chairman of the SNB. Despite the recent reduction in borrowing costs, the likelihood of such a step has decreased. Schlegel clarified that negative rates cannot be ruled out in the future, but their necessity has diminished following the recent interest rate decision. Negative interest rates are not a popular tool for the central bank. Nevertheless, the SNB considered this measure between 2014 and 2022 to prevent the appreciation of the franc. A stronger franc makes Swiss exports more difficult, as it increases the costs of Swiss products abroad. Despite their unpopularity with banks and savers, negative interest rates can dampen the demand for the safe Swiss franc. "No one likes negative interest rates. The Swiss National Bank does not like them either," Schlegel reiterated the SNB's ambivalence towards this monetary policy measure.