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Swiss franc appreciation has led to tighter monetary conditions – SNB minutes

Published on April 16, 2026

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Justin Low
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Since the December meeting, financial market situation has been characterised by elevated volatility
Middle East conflict has resulted in surge in energy prices, which led to a global rise in inflation expectations
With the appreciation of the Swiss franc since December, monetary conditions are tighter
However, monetary policy remains expansionary
The board discussed the various factors responsible for the movements in the Swiss franc exchange rate
One factor is the Swiss franc's role as a safe haven
The discussion also addressed the latest developments in energy prices
Uncertainty about the future course of oil prices remains high
The board also discussed the conditional inflation forecast, which assumes that the policy rate remains at 0%
In the short-term, it is higher than the December forecast due to the rise in energy prices
In the medium-term, the appreciation of the Swiss franc reduces inflationary pressure, countering possible second-round effects of the rise in energy prices
Therefore, the inflation forecast over the medium-term is very close to that of the previous quarter
Despite the escalation in the Middle East, the scenario for global economic developments has not changed fundamentally
In light of the outlooks presented with regards to inflation and the economy, monetary conditions remain appropriate
Monetary policy can currently still be considered expansionary
However, the SNB's willingness to intervene in the foreign exchange market should remain high in order to counter a rapid and excessive appreciation of the Swiss franc, which would jeopardise price stability in Switzerland
Full minutes

The key takeaway here is that the SNB is in stasis in now having to deal with the indirect repercussions of the US-Iran conflict. To be more specific, the issue of taming a much stronger Swiss franc currency.

The mention of that being a counterweight to a second-round impact of inflation pressures is a valid argument. However, the main worry is that the currency's strength will remain sticky and prove to be more detrimental when viewed from a more structural outlook.

With the central bank already wanting to avoid unconventional monetary policy such as negative interest rates any time soon, this is a welcome distraction but it won't change the path that the Swiss economy is put on in the bigger picture.

This article was written by Justin Low at investinglive.com. Full story here Are you the author?

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