Swiss National Bank increases key interest rate to 1.5 percent – Economy
Despite inflation and turbulence in the Swiss banking sector, the SNB is raising interest rates by half a percentage point. Inflation is high by Swiss standards, but well below the European average.
The Swiss National Bank (SNB) is raising interest rates again due to renewed inflationary pressure and despite the recent turbulence in the banking sector. The SNB key interest rate will be raised by 0.5 percentage points to 1.5 percent, as the central bank announced on Thursday.
Inflation in the Switzerland is still low compared to other western industrialized countries at 3.4 percent, but is above the SNB target of zero to two percent. For comparison: In the euro zone, the inflation rate in February was 8.5 percent compared to the previous month. The Swiss National Bank forecasts an average price increase of 2.6 percent for 2023.
The central bank also stated that it cannot be ruled out that additional interest rate hikes will be necessary to ensure price stability in the medium term. If necessary, the SNB also intends to continue to intervene in the foreign exchange market. To the Takeover of Credit Suisse by competitor UBS the National Bank explained that the measures announced at the weekend had “stopped the crisis”.
The majority of economists surveyed by the Reuters news agency had forecast a rate hike of 0.5 percentage points. The SNB’s monetary policy assessment takes place on a quarterly basis.