Similar to what we're seeing in Japan, the Covid pandemic gave the SNB an out to move away from NIRP. They embraced that but in the end, it looks like they've failed to dig themselves out of the hole. It feels like it is only a matter of time before negative rates return but this week won't be that.
That being said, the equation and the SNB's fate very much relies on the Swiss franc from hereon. So, things can change quickly if and when it does.
As such, the SNB may be cornered into pursuing negative rates so long as the the franc continues to be one of the top performers in the major currencies space.
If inflation developments play out softer than what the central bank is forecasting, it's only a matter of time before we start seeing the SNB change their view on negative rates.
As much as the Swiss central bank maintains that there is a high bar before reaching negative rates, the path of least resistance is still favouring easier and looser monetary policy moving forward rather than a tighter one.
And the paradox here is that it could be one triggered and fueled by a stronger currency. I definitely do not envy being in the SNB's position.
This article was written by Justin Low at investinglive.com.Hence then, the article about snb set to steer clear of negative rates at least for now was published today ( ) and is available on forex live ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
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