Switzerland cuts interest rates by 50 basis points
The National Bank's decision: cut from 1% to 0.5%, the lowest level since November 2022
1' min read
1' min read
The Swiss National Bank cut its interest rate by 50 basis points, the biggest reduction in almost 10 years, in an attempt to pre-empt cuts planned by other central banks and limit the appreciation of the Swiss franc. The SNB cut its key interest rate from 1.0% to 0.5%, the lowest level since November 2022.
More than 85% of the economists polled by Reuters expected a smaller cut of 25 basis points, even though the markets had predicted a 50-point cut.
The Swiss monetary authority emphasises that "the underlying inflationary pressure has continued to fall this quarter. With today's relaxation of monetary policy, the National Bank is taking this development into account. It will continue to observe the situation closely and, if necessary, adjust monetary policy to keep inflation in the medium term in the area of price stability'.
The cut was the strongest since the emergency cut in January 2015, when the SNB suddenly abandoned the minimum exchange rate against the euro.
The decision was the first under the leadership of the new SNB president Martin Schlegel and saw an acceleration compared to the policy of his predecessor Thomas Jordan, who oversaw three reductions of 25 basis points over the course of this year.
