SNB - Swiss National Bank

SNB - Swiss National Bank

23-SEPT-2022


SNB REVIEW: As expected, the SNB lifted its Policy Rate out of NIRP to 0.50% via a 75bp hike; however, this magnitude disappointed market pricing for a 100bp move and thus a pronounced dovish reaction in the CHF, and to a lesser extent in markets broadly, occurred. A hike that was once again deemed to be merited by the inflation situation and as such was accompanied by reiterated guidance that further hikes cannot be ruled out. Additionally, repeating guidance that they are willing to intervene in FX markets as necessary with Chairman Jordan subsequently stressing they are ready to step in to prevent excessive weakening or strengthening of the Franc. Rates/FX aside, the SNB has altered the mechanics of its Exemption system, the Threshold for this was reduced to 28x (prev. 30x) at the June gathering, and now sight deposits above the threshold are to be remunerated at a 0.00% interest rate - essentially flipping the prior system to account for the lifting of rates into positive territory.