Swiss National Bank ready to take rates below zero to tackle low inflation.

 The Swiss National Bank is ready to intervene in the foreign currency markets and cut interest rates even below zero to prevent inflation falling below its price stability target, Chairman Martin Schlegel said on Tuesday.

Swiss inflation fell to 0% in April, its lowest level in four years, government data showed on Monday, at the bottom end of the SNB’s 0-2% target range.

The reading fueled expectations the SNB will cut rates from the current 0.25% at its next policy meeting on June 19, while markets expect rates could go below zero later in the year.

Schlegel said the SNB had expected inflation to come down, and it would now be “interesting” what the central bank would decide.

The central bank was also prepared to intervene in the foreign currency markets to weaken the Swiss franc, whose appreciation contributes to low inflation by making imports cheaper.

Source: Reuters