SNB lowers Sight Deposit Rate by 25 bps to 0% as expected

The Swiss National Bank (SNB) announced on Thursday that it cut the benchmark Sight Deposit Rate by 25 basis points (bps) to 0% from 0.25% following its monetary policy assessment for the June quarter.

 The decision came in line with the market expectations.

Summary of the SNB policy statement

Prepared to intervene on FX market as needed.

SNB sees 2025 Swiss GDP at around 1-1.5% (previous forecast was for 1.0-1.5%).

SNB sees 2026 Swiss GDP at around 1-1.5% (previous forecast was for around 1.5%).

SNB sees Q1 2028 inflation at 0.7%.

SNB sees 2025 inflation at 0.2% (previous forecast was for 0.4%).

SNB sees 2026 inflation at 0.5% (previous forecast was for 0.8%).

SNB sees 2027 inflation at 0.7% (previous forecast was for 0.8%).

Economic outlook for Switzerland remains uncertain.

Banks’ sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold.

Remains willing to be active in the foreign exchange market as necessary.

Developments abroad continue to represent the main risk.

Scenario for the global economy remains subject to high uncertainty.

For example, trade barriers could be raised further, leading to a more pronounced slowdown in the global economy.

Global economy continued to grow at a moderate pace in the first quarter of 2025.

At the same time, it cannot be ruled out that fiscal policy will support growth more strongly than expected.

Global economic outlook for the coming quarters has deteriorated due to the increase in trade tensions.

In its baseline scenario, the SNB anticipates that growth in the global economy will weaken over the coming quarters.

Market reaction to the SNB interest rate decision

The USD/CHF pair pares some gains to trade back under 0.8200 in an immediate reaction to the SNB interest rate decision. The pair is up 0.15% on the day, trading at 0.8195, as of writing.