The Swiss National Bank (SNB) is keeping key interest at zero percent. However, the U.S.-Israeli war against Iran is, in part, playing into Switzerland’s hands.
The Swiss National Bank has raised its inflation forecast.
Due to the escalation in the Middle East, the central bank expects higher energy prices and has therefore revised its short-term inflation expectations upward.
Inflationary pressure unchanged
The conditional inflation forecast for the coming quarters is higher than in December 2025 due to the rise in energy prices, SNB President Martin Schlegel told the media on Thursday in Zurich.
However, medium-term inflationary pressure has hardly changed compared to the most recent assessment of the economic situation.
The forecast remains within the price stability range – defined by the SNB as between zero and two percent – throughout the entire forecast period.
Deflation averted
The U.S.-Israeli war of aggression against the Islamic Republic of Iran is, in a sense, playing into the hands of the Swiss National Bank, provided the Swiss franc does not skyrocket in the face of the crisis.
As a result, however, negative interest rates have moved out of the central bank’s focus, since inflation is no longer at zero with a tendency toward deflation.
Schlegel explained that the interest rate differential with other countries is sufficient to ward off pressure on the Swiss franc.
However, Schlegel declined to reveal exactly how the SNB balances price stability with interventions in the capital markets to weaken the national currency.
The SNB chief merely stated that the bank’s readiness to intervene in the foreign exchange market has increased. The Swiss National Bank left open exactly how and whether it has intervened.
Focus on the real estate
Regarding financial stability, for which the central bankers are also responsible, the SNB remained calm, as SNB Vice Chairman Antoine Martin explained to the media.
Neither the large mortgage portfolio of Switzerland’s second-largest banking group, Raiffeisen, nor the current hot topic on the stock markets, private credit, are causes for concern.
However, the SNB is monitoring the Swiss real estate market with concern and is keeping a close eye on the situation, the statement added.
High Uncertainty
“A rapid and excessive appreciation of the Swiss franc poses a risk to price stability,” said Schlegel, summarizing the current assessment of the situation.
Uncertainty about the future course of global events has not prompted the Swiss National Bank to change interest rates at this time.
March 19, 2026/kut./ena.
