by © Marekusz | Dreamstime.com The rate on deposits at the Swiss National Bank (SNB) is currently -0.75%. And while taking the rate further into negative territory is not the base case scenario, it cannot be excluded, according to some economists at the bank UBS. The probability that the SNB lowers rates further is not a ...
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© Marekusz | Dreamstime.com
The rate on deposits at the Swiss National Bank (SNB) is currently -0.75%. And while taking the rate further into negative territory is not the base case scenario, it cannot be excluded, according to some economists at the bank UBS.
The probability that the SNB lowers rates further is not a base scenario, according to Thomas Jordan, the bank’s chief, reported the newspaper 20 Minutes.
However, economists at UBS think it is possible, and give it a 30% probability of happening. Part of the challenge for the SNB is the strength of the Swiss franc, which went above 1.080 to the USD in March. On 20 May 2020, one Swiss franc was priced at 1.035 USD.
In January 2020, the US Treasury added Switzerland to its “monitoring list”. Those on the list are trading partners whose currency practices merit close attention. It is no secret that the Swiss National Bank (SNB) has been actively trying to weaken the Swiss franc, which is widely considered overvalued.
In January 2020, the newspaper Bilan reported that negative SNB rates had cost Swiss banks an estimated CHF 8 billion over the last 5 years.
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