Swiss National Bank’s Tschudin says policy choices include FX intervention, negative rates

The Swiss National Bank (SNB) remains committed to price stability, with inflation targeted between 0% and 2%, despite recent leadership changes, according to board member Petra Tschudin. She emphasized that the SNB’s tools and policies remain unchanged under new Chairman Martin Schlegel, who succeeded Thomas Jordan last year.

Tschudin highlighted that while inflation may temporarily fall outside the target range, the medium-term outlook is what matters most. She reaffirmed that the SNB’s policy toolkit includes foreign exchange interventions and, if necessary, negative interest rates—a tool the bank used from 2014 to 2022. Negative rates could help manage interest rate differentials and prevent excessive appreciation of the Swiss franc, which could lower inflation and harm exporters.

Markets anticipate a potential rate cut at the SNB’s March 18 meeting following a drop in Swiss inflation to 0.4% in January. Tschudin indicated that the bank would consider reintroducing negative rates if needed, echoing recent comments from Chairman Schlegel, though both expressed a preference to avoid such a move unless necessary.