SNB Vice Chairman Reaffirms Effectiveness of Negative Rates

Martin Schlegel, Vice Chairman of the Swiss National Bank (SNB), emphasized on Thursday that although the central bank does not prefer negative interest rates, they have proven effective and could be reintroduced if future economic conditions require.

Future Consideration of Negative Rates

Schlegel stated, "At the current juncture, we cannot exclude negative interest rates in the future." He added, "With these cuts today, the likelihood of negative rates has become smaller." Schlegel's comments highlight the SNB's strategic approach to monetary policy, balancing current economic conditions with potential future needs.

Role of Negative Rates in Managing the Swiss Franc

Regarding the Swiss franc, Schlegel noted that negative rates have previously helped mitigate the currency's appeal during periods of excessive strength. "The SNB looks at the overall franc situation, not just its performance against the euro," he explained.

Recent Policy Adjustments

Schlegel's remarks coincide with the SNB's recent decision to loosen monetary policy amid easing inflation pressures. Today, the bank announced it had lowered its policy rate by 50 basis points to 0.50%, reflecting its ongoing commitment to economic stability.