Swiss Central Bank Likely to Maintain Zero Policy Rate Amid Rising Oil Prices

Economist Andrew Kenningham from Capital Economics has indicated that the Swiss National Bank is expected to keep its policy rate at zero next week, despite the rising oil and gas prices and their impact on inflation. According to Jin10, Kenningham noted that the transmission effect of energy prices on inflation is likely to be moderate, and the upward pressure on the Swiss franc will help mitigate any inflationary impact. This situation suggests that the threshold for a rate cut is high, while the threshold for a rate hike is even higher compared to the European Central Bank. He further explained that amid the increasing risk of rate hikes by the European Central Bank, the Swiss National Bank can maintain a differential of approximately 200 basis points without lowering its policy rate.