Franc could survive if SNB implements only a 25 bps rate step or refrain from one altogether – Commerzbank

The Swiss National Bank (SNB) decision is on the agenda for today. Economists at Commerzbank analyze how the SNB Monetary Policy Announcement could impact the Franc.

SNB might also be considering that the medium-term damage can be reduced

“If the SNB were to implement only a 25 bps rate step or refrain from one altogether that would not immediately be good news for the Franc. However, the SNB might also be considering that the medium-term damage can be reduced.”

“If the SNB were to credibly communicate to the market today that no step or 25 bps are nothing else but a wait-and-see approach until the effects of the recent turbulence can be gauged and if it were to communicate credibly that the rate step not taken today would be made up for in the near future, the result would not have to be as awful for CHF as one might think. In that case, everything would depend on SNB Chair Thomas Jordan’s communication skills in today's SNB press conference.”

See – SNB Preview: Forecasts from six major banks, acting with caution