The Swiss National Bank kept its economic growth projection for this year unchanged at between one and 1.5%.
Central bank chief Martin Schlegel told reporters that “the US tariffs present a major challenge for affected companies and are likely to dampen economic activity”.
United States President Donald Trump surprised Switzerland last month by announcing 39 percent duties on imports from the country.
Most analysts had anticipated the SNB would maintain the 0% rate despite recent speculation about a potential return to negative rates.
This policy aimed to control the Swiss franc’s appreciation and maintain export competitiveness during turbulent periods.
He explained that “we came to the conclusion that it’s the right decision to leave interest rates at 0%”.
He added that the SNB would “continue to monitor the situation and adjust our monetary policy if necessary”.
He clarified that “the bar to go into negative territory is higher than for a normal rate cut”.
The Swiss government is attempting to negotiate lower tariff rates with Washington.
Such measures would significantly harm Switzerland since pharmaceuticals represent its largest export sector.
Capital Economics analyst Adrian Prettejohn predicted in a market note that the SNB would return to negative rates “over the coming quarters”. – AFP
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