UBS predicts SNB to cut policy rate to 0.25% in March

Published 13/03/2025, 12:30
UBS predicts SNB to cut policy rate to 0.25% in March

UBS analysts project that the Swiss National Bank (SNB) will lower its policy rate by 25 basis points to 0.25% in March. This adjustment is expected to be the final rate cut in the current series of monetary policy changes, according to UBS’s SNB preview.

UBS indicated that while there is a possibility of the policy rate falling to 0% or dipping into negative territory, such scenarios are not the primary expectation.

The analysts noted that even with a policy rate of 0.25%, certain banks’ reserves would incur negative interest rates under the existing tiered remuneration framework.

The potential implications of this rate cut could lead to a reconsideration of the discount factor applied between the SNB’s upper and lower remuneration rates. UBS suggested that if the SNB were to further reduce the policy rate to 0%, it would likely be accompanied by more significant modifications to the tiering system.

Additionally, there could be changes to the availability of SNB bills and the trading of SARON, which is the Swiss Average Rate Overnight.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.