Swiss Central Bank President: Will Return to Negative Interest Rates if Necessary

Jin10 data reported on September 10 that Swiss Central Bank President Schlegel stated that if necessary, the central bank will not shy away from lowering borrowing costs below zero. With only two weeks left until the quarterly interest rate decision, Schlegel emphasized that he and his colleagues are prepared to return to the policy stance they exited three years ago if needed. At that time, decision-makers will decide whether to maintain the current 0% interest rate level. Schlegel stated, "If it is really necessary, we will not hesitate." Several officials, including Schlegel, have previously indicated that the threshold for lowering rates is higher than for other policy adjustments, due to the potential adverse effects of negative interest rate policies on pensions and the financial system. Most economists expect decision-makers to keep rates unchanged at the meeting on September 25; a minority predicts a 25 basis point cut to -0.25%.