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ForexMedium•19 February 2026•

1 min read

SNB Faces Deflationary Risks as Safe-Haven Demand Drives Franc to Record Highs

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The Swiss National Bank (SNB) is currently grappling with mounting deflationary pressures as domestic price inflation falls sharply. This economic shift is complicated by the Swiss franc's continued strength, with the EUR/CHF pair hitting record lows below the 0.92 level. Escalating geopolitical tensions between the United States and Iran have further boosted the franc’s appeal as a premier safe-haven asset. As the currency inches toward the 0.91 mark, the SNB finds itself in a difficult position regarding its inflation mandate. The central bank is reportedly seeking to avoid a return to negative interest rates or other unconventional monetary policy measures. Market analysts suggest that continued currency appreciation may eventually force the SNB to intervene to protect the Swiss economy from deflationary shocks.