ZURICH — Switzerland’s central bank cut its policy rate to zero in June 2025 and has said since then, at every opportunity, that it would prefer not to go lower. The franc has not been listening.
The currency reached a record 0.91 per euro on Tuesday, up about 7 percent in a year, as investors unsettled by trade disputes and by the debts of larger countries kept buying the one European currency they trust absolutely. Swiss consumer prices fell 0.3 percent in the year to September, the third consecutive month of deflation, with the cost of imported goods down nearly 3 percent. The Swiss National Bank’s mandate defines price stability as inflation between zero and 2 percent. It is now below the range.
Two people familiar with the central bank’s deliberations, who spoke on the condition of anonymity, said officials had begun discussing with commercial banks the technical arrangements for a negative rate at the Dec. 10 policy meeting, including the thresholds above which banks would be charged on their reserves. Neither said a decision had been made. Both said the bank would prefer to intervene in currency markets first, selling francs for euros and dollars, and had done so in September for the first time in two years.
“They have two tools and they dislike both,” said Beat Rüegsegger, an economist at a Zurich bank. “Intervention makes them a target for accusations of currency manipulation, especially from Washington. Negative rates make them a target for every saver, pension fund and bank in the country. Between 2015 and 2022 they used both, and they have spent four years hoping never to do it again.”
Exporters are already in the regime’s shadow. Zbinden Präzision, a maker of precision components for medical devices in the Jura, sells 80 percent of its output in euros and dollars and pays its 210 employees in francs. “Every centime the franc rises is a centime off our margin, and we have had seven of them,” said Corinne Zbinden, who runs the family company. “We cannot raise prices. Our customers in Germany have their own problems. So we absorb it, and we stop hiring.”
Savers remember the last episode differently. Swiss banks began passing negative rates to large depositors in 2019, and some to ordinary customers with balances above 100,000 francs. Reto Gasser, 63, a retired engineer in Winterthur, moved part of his savings into a safe-deposit box in 2020. “I did not do it for the return,” he said. “I did it because I refused to pay a bank to hold my money. If they do it again, the box is still there.”
The central bank declined to comment beyond its published statements, the most recent of which said it would “adjust its monetary policy if necessary” to keep prices stable over the medium term. Economists read the sentence the way they read all of the bank’s sentences: as a statement that it would rather not, and might.
A version of this article appears in print on Oct. 12, 2026, Section B, Page 2 of the European edition with the headline: Switzerland Edges Back Toward Negative Interest Rates as the Franc Climbs Again.
