The Swiss National Bank may hold its policy rate at zero through end-2027, according to Bloomberg sources cited by ING’s Chris Turner, marking a significant shift in monetary policy expectations for the franc. This extended zero-rate outlook aligns with ING’s existing forecasts and reinforces Switzerland’s position as a key funding currency in global foreign exchange markets.
The prolonged accommodative stance comes as the SNB navigates persistent deflation risks and a strengthening franc that threatens export competitiveness. Traders and fund managers are already adjusting positions to exploit carry trade opportunities, borrowing in low-yielding Swiss francs to invest in higher-yielding currencies elsewhere. The move contrasts sharply with other major central banks that have maintained tighter monetary policies.
Currency strategists expect increased volatility in CHF crosses as positioning intensifies around this extended timeframe. The decision could weigh on Swiss franc appreciation against major currencies while making it increasingly attractive as a funding vehicle for leveraged trades.
FXnCO Insight
Position for extended CHF weakness in carry trades while monitoring SNB intervention risks that could rapidly reverse funding strategies if the franc appreciates too sharply.
Source: FXStreet