Officials led by President Martin Schlegel reduced their benchmark to 0.25% on Thursday, in a step anticipated by traders and a large majority of economists. In an accompanying statement, policymakers didn’t offer specific signals on their next move.

“Uncertainty about global economic and inflation developments has increased significantly,” Schlegel told reporters in Zurich. “As a result, the outlook for inflation in Switzerland, too, is currently very uncertain. At present, the risks are predominantly to the downside.”

The central bank’s fifth cut in the current cycle leaves its rate at the lowest of any managing the world’s 10 most-traded currencies. That stance contrasts with the hesitancy to ease further by global peers such as the US Federal Reserve, which on Wednesday acknowledged a backdrop of high uncertainty.

The Swiss franc erased gains after the decision, traded 0.1% lower at 0.9580 versus the euro. Swaps pricing indicates traders expect no more rate cuts by the SNB this year.

The move by Swiss policymakers, following up on a surprise half-point reduction in December, shores up their defense of the franc in anticipation of volatile times ahead. While the currency has weakened this year, it remains vulnerable as a haven for investors guarding against instability just as US President Donald Trump ratchets up global trade tensions and war continues to rage in Ukraine.

“We also remain willing to be active in the foreign exchange market as necessary,” Schlegel said, sticking with the SNB’s standard language.

The reduction might pre-emptively dissuade such inflows, but also uses up precious room for easing before reaching zero, which is now just one conventional quarter-point step away.

Dropping the rate to that level would force officials into a tough choice between market interventions to repel foreign-exchange speculation or else going negative again, as they did in the period from 2015 until 2022.

While subzero borrowing costs inflict pain on the country’s financial system, selling the franc could potentially drawing the ire of Trump, whose administration branded Switzerland as a currency manipulator when he was last in office.