SNB to keep rates at 0% this year and probably in 2027, economists say: Reuters poll 

By Indradip Ghosh

BENGALURU, June 15 (Reuters) - The Swiss National Bank will keep its key policy rate at 0% on June 18 and for the rest of the year, according to all the economists who responded to a Reuters poll, as a stronger franc partly offset the impact of the energy price shock related to the U.S. war on Iran. 

Swiss inflation was 0.6% in May, comfortably within the SNB’s 0% to 2% target band, even as other economies, including the U.S. and euro zone, felt the inflationary impact of surging fuel prices.

SNB Chairman Martin Schlegel recently said medium-term inflation pressures had “hardly changed,” suggesting the central bank was unlikely to follow the European Central Bank, which raised rates last week.

All 35 economists in the June 11-15 Reuters poll predicted the SNB would keep its policy rate at 0% this week, already the lowest globally. All 28 who responded with forecasts until the end of 2026 saw rates staying there this year.

Only four economists expected one or two quarter-point rate rises in 2027.  

"Energy components have supported headline inflation, albeit pass-through from energy prices into CPI has moderated ... On the flipside, the Swiss franc still represents a disinflationary force," said Chiara Angeloni, Europe economist at Bank of America.

"With those opposing forces from FX and energy prices at play and Switzerland's low inflation starting point, we think inflation pressures weigh less on the SNB than on most central banks ... Our base case remains the zero‑interest‑rate policy stays in place until end-2027."

Inflation is expected to average 0.6% and 0.7% this year and next, respectively, poll medians showed, reinforcing expectations for steady policy.

Many economists said the SNB's priority will be the franc, which has gained nearly 1.2% against the euro this year. 

"By signalling an increased readiness to intervene in the FX markets amid the Middle East turmoil, the SNB appeared more concerned with Swiss franc developments than with the energy shock itself," said Alessandro Di Spirito, rate strategist at Barclays.

"We think the overall messaging at the upcoming meeting will not change meaningfully, with no signal of an imminent hike."

Switzerland's economy is expected to grow 1.0% this year and 1.4% in 2027, on average, according to the poll's median forecast, a slight downgrade from March.

(Other stories from the Reuters global economic poll)

(Reporting by Indradip Ghosh; Polling by Mumal Rathore; Editing by Ross Finley and Kate Mayberry)