ECB and SNB: What's Next for Italy-Switzerland Border Residents

Context

In brief

• ECB and SNB left interest rates unchanged.
• The interest rate differential affects the CHF/EUR exchange rate.
• The SNB is ready to intervene in the foreign exchange market.

Key Facts

• What: ECB and SNB left interest rates unchanged.
• When: ECB on 23 July, SNB on 18 June.
• Where: Decisions taken in Frankfurt and Zurich.
• Who: ECB and SNB.
• Amount: ECB rates: 2.25%, 2.40%, 2.65%. SNB rate: 0%.

At six in the morning, at the customs of Chiasso or Ponte Chiasso, the queue of cars is already long. Those who travel it every day to go to work have learned to check the exchange rate of the day even before traffic: it is now an automatic gesture, because the salary arrives in francs and the groceries, rent, mortgage remain in euros. On July 23, the European Central Bank left its key interest rates unchanged, confirming the pause after the June hike. The Swiss National Bank, for its part, had already been stuck at zero since June 18.

For those who live on this double border, the simultaneous shutdown of the two central banks is not a detail for a news agency: it defines the terrain on which the exchange rate will move in the coming weeks.

The Governing Council of the ECB confirmed the three key rates at the same levels as those set with the hike on 11 June: the deposit rate at 2.25%, the rate on the main refinancing operations at 2.40%, the rate on marginal loans at 2.65%, all of which have been in force since 17 June. The reason for the pause is uncertainty over energy prices — which have risen, the central bank explains, well above pre-conflict levels in the Middle East, whose impact on inflation has not yet fully manifested itself. There are no commitments made in advance: the approach remains meeting by meeting, with the stated aim of stabilising inflation at 2% over the medium term. The next appointment is on 9-10 September, when the Governing Council will travel to Berlin at the invitation of the Deutsche Bundesbank.

The SNB had anticipated the move by a good month. On June 18, it left its policy rate unchanged at 0%, with Swiss inflation forecast at 0.6% for 2026 and 2027 and 0.7% for 2028 — levels that Zurich considers consistent with its price stability mandate. In the same statement, the central bank said something that weighs more than the key interest rate figure: a greater willingness to intervene in the foreign exchange market to contain an excessive appreciation of the franc, fueled by the uncertain geopolitical climate.

Operational details

This is where the two decisions talk to each other. A wider rate differential tends to make the franc relatively more attractive to those seeking a haven from volatility, supporting its value against the euro. An SNB that is ready to intervene is pushing in the opposite direction, to contain precisely that strengthening. Which of the two forces will prevail is not decided at the table: it depends on how inflation, energy prices and capital flows evolve in the coming weeks, not on a statement published today. It is worth saying clearly: this article describes monetary policy decisions that have already been made public, not exchange rate forecasts or investment advice. For significant amounts, the reference remains a qualified consultant.

Between the end of summer and mid-September, two events focus attention. The first is the ECB meeting on 9-10 September in Berlin: the central bank has hinted that a new hike remains possible if the energy shock worsens. The second is the SNB's quarterly valuation, which is expected around the same time — some market calendars indicate the end of September, but at the time of writing, the SNB had not yet published an official date. However, it has already shown with its announcement in June that it considers the level of the franc a priority.

What to do, then, before those two dates:

• Mark 9-10 September (ECB decision) and the SNB quarterly assessment expected in the same period: these are the times when the picture can change.
• If you have a scheduled conversion — salary, transfer, mortgage — check the SNB reference exchange rate of the same day, not the one from a week before.
• Don't rely on a single statement from the ECB or the SNB to decide the timing of a transaction: both follow a meeting-by-meeting approach and can change emphasis quickly.
• Read the official statement, not just the title of a summary article: the language of reservations — "depends on the data" — is often the most informative part.

Central banks are moving at different speeds, and no one can tell you for sure where the exchange rate will be in September. What you can check today is how many euros you really receive for your francs. Cambiavalute.ch publish the terms and conditions applied to your exchanges transparently, so you can review them before deciding, no matter what the next meeting decides.

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Key points

The decisions of the European and Swiss central banks directly affect the CHF/EUR exchange rate, with significant implications for border crossers living between Italy and Switzerland. The stability of interest rates and the SNB's willingness to intervene in the foreign exchange market create an environment of uncertainty that requires attention and planning. Following ECB and SNB meetings closely, reading official press releases and using transparent currency exchange tools are essential steps to better manage your finances in this context.

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Source: tio.ch