The Swiss National Bank (SNB) slashed its key interest rate to 0% on Thursday, marking its sixth consecutive rate cut since March 2024. The decision comes in response to falling inflation, the strengthening Swiss franc, and heightened global uncertainty stemming from U.S. trade policies.
The benchmark rate was reduced from 0.25% after inflation in Switzerland dipped into negative territory in May — the first time in four years — moving below the SNB’s target range of 0–2%.
In a statement, the SNB said the rate cut is intended to “counter the lower inflationary pressure” observed over recent months. The central bank also signaled that it may consider returning to negative interest rates — a measure last used between 2014 and 2022 — if economic conditions deteriorate further.
SNB Chairman Martin Schlegel emphasized that a return to negative rates would be a last resort due to their adverse effects on banks, pension funds, and savers. He noted that future monetary policy decisions would hinge on global economic developments, with the next policy review scheduled for September.
Analysts attributed the latest cut largely to the appreciation of the Swiss franc, which has risen by approximately 11% against the U.S. dollar in 2025. While the stronger currency has helped lower import costs and curb inflation, it also threatens to hurt Swiss exporters and economic growth.
The SNB also highlighted mounting global risks, particularly the escalation in trade tensions after the United States imposed broad tariffs earlier this year under President Donald Trump.
Although the central bank reiterated its willingness to intervene in foreign exchange markets if necessary, it remains cautious about being labelled a currency manipulator.
The SNB joins a growing list of central banks easing monetary policy amid slowing global growth. Norway’s central bank also delivered its first rate cut in five years on Thursday, while the European Central Bank lowered rates earlier in June.
