Swiss National Bank vice chairman hints at further rate cuts
2024.10.10 13:58
By John Revill
ZURICH (Reuters) – The Swiss National Bank could cut interest rates again this year, Vice Chairman Antoine Martin said on Thursday, citing the current moderate economic growth in the country and low inflation.
“With inflation being reasonably low in Switzerland and with an economy that could grow faster, that tends in the direction of a lower policy rate,” Martin told an event organised by the Swiss Financial Analysts Association in Zurich.
Martin referred to comments by other SNB officials, who said last month there could be another rate cut. Martin added “there are never any promises.”
The SNB has been at the forefront of central banks cutting interest rates, lowering them three times this year to 1.0%.
It has been able to cut rates after Swiss inflation has stayed within the bank’s 0-2% target range over the last 15 months, while prices rose by 0.8% in September, the lowest level in more than three years.
Martin said the SNB could eventually consider taking interest rates into negative territory, echoing comments by SNB Chairman Martin Schlegel last week.
The SNB has previously used negative rates to cool the franc, exiting the policy in September 2022 as it raised rates to combat inflation.
Martin said maintaining a differential in the interest rate to other central banks was an important influence on the exchange rate, which in turn affected inflation.
Still, with current inflation “firmly” within its target range, the SNB was in a comfortable position, Martin said.
“There are imaginable scenarios where this is a tool that we would use because it’s a particularly useful tool,” Martin said, referring to negative rates.
“But we’re not today in a situation that this is something that we’re considering.”
