Swiss inflation was unchanged in February close to zero, a worry for the country’s central bank after it voiced increased willingness to intervene in foreign-exchange markets to halt recent gains in the franc.
Consumer prices were up 0.1% compared with February last year, the same rise as in January, Switzerland’s statistics agency said Wednesday. Swiss inflation was last negative in May.
The Swiss National Bank has struggled to limit the appreciation of the franc over the last year as investors have sought a safe haven from the upheaval caused by President Trump’s tariff hikes and innovations in foreign policy. The attacks on Iran over the weekend pushed the franc to its highest level against the euro in more than a decade on Monday.
A stronger franc lowers the domestic prices of imported goods, while also damping demand for Swiss goods abroad, which also cools inflation. The Swiss economy barely grew in the second half of last year after a significant rise in U.S. tariffs hit the country’s exports, which include luxury watches and chemicals.
The SNB has an inflation target of more than zero but below 2%. Central bankers fear periods of deflation, in which falling prices lead businesses and households to hold back on spending in anticipation of securing better deals in the future. This then weakens activity and prices in what can become a vicious circle.
The SNB has limited options to halt the appreciation of the franc. The central bank’s key interest rate is already at zero, and Chairman Martin Schlegel has long stressed there is a high bar to lowering the key rate below zero, underlining the negative impact on savers and the country’s banks.
The central bank could also sell francs to weaken the currency, thereby helping to boost the inflation rate.
In an unusual announcement, the SNB said Monday that its willingness to sell francs has increased.
“We are prepared to intervene in the foreign-exchange market to counter a rapid and excessive appreciation of the Swiss franc, which jeopardizes price stability in Switzerland,” the bank said.
The franc fell back slightly against other currencies after the announcement. However, it did little to dent the gain of more than 14% against the dollar in the past year.
“Such a warning from the SNB is rather rare,” Commerzbank analyst Michael Pfister said in a note to clients.
“For the time being, it is likely that officials have ensured the market will only test stronger franc levels very cautiously, even amid rising geopolitical risks,” he added.
The move could put Switzerland in the crosshairs of the U.S. Treasury, which put the Alpine nation on its watch list for currency manipulation.
Switzerland is due to publish its foreign-currency reserves for February on Friday.
The jump in prices of oil and gas prompted by the conflict in the Middle East could stoke an increase in inflation in the months ahead. More than 70% of energy consumed in Switzerland is imported, according to a 2025 study by the Swiss Energy Foundation.
“A stable currency and potentially higher energy prices, at least in the near term, largely eliminate the risk of the Swiss economy slipping into deflation over the coming quarters,” said Ankita Amajuri, Europe economist at Pantheon Macroeconomics in a note.
Imported-product prices were down 1.6% in February compared with the same month of last year, while domestic inflation was 0.6%, Wednesday’s data showed.
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