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SNB minutes show higher inflation risks, but rate stays at 0%
The Swiss National Bank said monetary conditions remain appropriate, while it flagged Middle East shipping risks and renewed concern about excessive franc appreciation.
The Swiss National Bank’s June policy minutes indicated policymakers have become more concerned about inflation upside risks, citing higher energy prices and geopolitical tensions, but they judged there was no immediate need to tighten policy.
The Governing Board left the SNB policy rate unchanged at 0%, saying price stability was not jeopardized and that medium term inflation dynamics were virtually unchanged versus the March assessment. It also warned that a prolonged disruption to shipping through the Strait of Hormuz could tighten energy markets further, potentially leading to weaker growth and higher inflation than expected.
Beyond energy, the minutes emphasized ongoing uncertainty tied to the Middle East, alongside continued monitoring of exchange rate developments. The SNB reiterated that the risk of excessive Swiss franc appreciation remains, and that its willingness to intervene in the foreign exchange market should remain elevated if needed to prevent appreciation that could threaten price stability.
The minutes also described the economy as performing reasonably well, with first quarter GDP growth characterized as solid and numerous economic indicators pointing to positive momentum, though labor market conditions were described as subdued.