SNB to Keep Rate at 0% Amid Strong Franc Surge

The Swiss National Bank is set to maintain its benchmark interest rate at zero percent on Thursday, amid heightened scrutiny over the strengthening Swiss franc driven by safe-haven demand amid the ongoing conflict in the Middle East.

The decision, scheduled for March 19 in Zurich, comes as economists overwhelmingly anticipate no changes to monetary policy through 2026. Nearly all of 29 forecasters polled by Reuters expect the rate to remain unchanged, with only one outlier predicting a cut to 0.25 percent in the second quarter of 2026. This consensus holds despite the franc's recent appreciation, which has reached decade-high levels against the euro and made it the top-performing major European currency versus the dollar this year. The currency's surge, up nearly 2 percent against the euro since the U.S.-Israeli war on Iran began in late February, reflects investors seeking stability amid geopolitical tensions.

Central bank officials, led by President Martin Schlegel, face pressure to address the franc's strength, which threatens to suppress inflation and strain Switzerland's export-dependent economy. Annual consumer price growth stood at 0.1 percent last month, within the SNB's...