By John Revill
ZURICH (Reuters) - The Swiss National Bank will keep its expansive monetary policy on hold at its quarterly review on Thursday, a Reuters poll found, despite increasing calls on the bank to change course and ditch its controversial negative interest rates.
All 37 analysts polled by Reuters expected the SNB to stick with a policy rate of minus 0.75%, the same level it has maintained for nearly five years.
Chairman Thomas Jordan is also unanimously expected to keep the sight deposit rate the SNB charges commercial banks on funds they park with it overnight locked at minus 0.75%.
The SNB has defended negative rates as a key tool in its battle to curb the rise of the safe-haven Swiss franc, whose strength makes life difficult for Switzerland's export-orientated economy.
Swiss banks have criticized negative rates, which squeeze margins they earn from lending and cost banks nearly 1.7 billion Swiss francs ($1.7 billion) in the first nine months of 2019.
Several Swiss banks including UBS , Credit Suisse (S:CSGN) and Julius Baer (S:BAER) have passed on the cost of negative rates to rich customers, triggering an outcry from the Swiss Bankers Association, which said the charge punished savers and damaged the country's pension system.
The SNB will remain immune to such attacks, with only two of the analysts polled expecting the central bank to change the rate in the next 18 months.
That is because the strength of the franc is expected to remain the biggest concern for Jordan and his governing council, along with the slowing global economy.
The SNB is expected to keep describing the franc as "highly valued", in the view of most economists polled. The franc has gained nearly 3% against the euro (EURCHF=) this year.
"I expect the SNB's key rate to remain in negative territory for a very long period of time," said Charlotte de Montpellier from ING Financial Markets.
"If none of the risks to the global economy materialize, I believe that the SNB will keep its rate at the current level of -0.75% as long as possible, while intervening on the foreign exchange market when necessary."
If the situation deteriorated and the franc began to rise, the SNB could even reduce its interest rate to -1%, she said.
In the meantime, most economists expect the SNB to react to any spikes in the franc's value by stepping up currency market interventions.
"In the event of persistent appreciation pressure on the CHF, a rate cut would become more likely," said Maxime Botteron from Credit Suisse.
($1 = 0.9972 Swiss francs)
(Polling by Manjul Paul and Sujith Pai, editing by Ed Osmond)