The Swiss National Bank cut the benchmark interest rate twice in March and June, but the recent further slowdown in inflation and the strengthening of the Swiss franc create new possibilities for further easing of monetary policy.
The exchange rate of the US dollar against the Swiss franc has returned to near the lows of the beginning of the year, around 0.8500. Similar to the beginning of the year, the dollar has once again fallen to this region amid rising expectations of Federal Reserve rate cuts. Meanwhile, Switzerland's previous accommodative monetary policy has not significantly weakened the strength of the franc.
The continued strength of the Swiss franc may prompt the Swiss monetary authorities to take more active measures to curb its appreciation trend, including issuing warnings or taking actual intervention actions in the exchange rate. The last time the franc fell below the current level was in 2011.
An excessively strong franc could weaken the competitiveness of Swiss exports, adversely affecting its economy. This might be particularly challenging for an open economy that heavily relies on exports.
As of 04:30 Beijing time, the US dollar against the Swiss franc was reported at 0.8505, down 0.06%.
