Euro Plummets to Decade Low, Forcing SNB to Hold Rates at 0%
On March 19, the Swiss National Bank (SNB) held its key policy rate steady at 0%, marking the third straight meeting without a change. The decision is a direct response to a sharp appreciation in the Swiss franc, fueled by investor flight to safety after the war in Iran began on February 28. The franc has appreciated over 11% against the U.S. dollar in the past year, creating significant economic headwinds.
The pressure became acute as the euro briefly fell below 0.90 francs, a level unseen in a decade. A stronger franc hurts Switzerland's vital export sector by making its goods more expensive abroad and weighs on domestic price stability by making imports cheaper. This dynamic complicates the SNB's mandate, with annual inflation already low at 0.1%, resting at the bottom of the bank's 0%-2% target range.
SNB Prepares Intervention as USD Becomes Sole Safe Haven
In its policy statement, the central bank explicitly escalated its rhetoric, preparing markets for direct action to cap the franc's gains. The bank stated its readiness to act counters a rapid appreciation that could threaten price stability.
Given the conflict in the Middle East, the SNB’s willingness to intervene in the foreign exchange market has increased.
— Swiss National Bank
This aggressive stance comes as the U.S. dollar solidifies its position as the market's primary refuge. While the franc gains against the euro, market analysis indicates it is losing momentum against the dollar, which is benefiting most from a broad flight to quality. According to Bank of America analysts, bullish signals have been “triggered vs all other perceived ‘safe havens,’” noting that “even the mighty CHF has lost its uptrend” against the dollar. The SNB's readiness to intervene highlights its focus on the franc's value against the euro, even as its global safe-haven status is challenged.
Edgen Stock·Mar 19 2026, 09:25