The Swiss National Bank (SNB) has left its policy interest rate unchanged at 1.75%, as forecast by analysts, citing easing inflation yet ongoing global economic uncertainty.

“Monetary conditions are adequate, and we do not have to hint at any change of monetary policy in the future. Price stability is already ensured given our newest inflation forecast,” President Thomas Jordan told Bloomberg TV.

Although the central bank doesn’t forecast inflation will exceed the 2% ceiling before 2026, Jordan said rate hikes are not on the cards for now, but reducing borrowing costs could be an option in future meetings.

“In three months, we will look very carefully at the new forecast. Depending on the situation then, we will adapt monetary policy,” he said.

However, market expectations indicate a likely rate cut in March next year. Capital Economics’ Europe Economist Adrian Prettejohn forecasts the Swiss National Bank will lower borrowing costs by 75 basis points in 2024.

The central bank is currently in a holding pattern due to the country facing the weakest growth in four years next year, with inflation down to 1.4% and the Franc near an eight-year high against the Euro.

The SNB will likely “start selling Swiss Francs before considering rate cuts,” according to ING analysts Charlotte de Montpellier and Chris Turner. “There is nothing to suggest that rate cuts will be forthcoming soon.”

They forecast inflation at 2.1% for 2023, 1.9% in 2024 and 1.6% in 2025, Bloomberg reports.

Furthermore, the central bank’s tighter policy is impacting growth. Between July and September, growth was slim after Q2 was revised to contraction. The SNB forecasts the country’s economy to grow around 1% this year and within a range of between 0.5% and 1% next year.