The Swiss National Bank lowered interest rates on Thursday for the first time since June 2022, becoming the first major central bank to take such a step, citing success in its battle against inflation.
The Swiss National Bank eased its monetary constraints, reducing the rate by 0.25 percentage points to 1.5 percent, effective from tomorrow, Friday.
While the US Federal Reserve maintained its rates on Wednesday, the Swiss National Bank changed its monetary policy for the first time since the rapid tightening measures began in 2022.
According to the central bank’s statement, “Monetary policy easing was possible because inflation fighting over the past two and a half years has been effective.”
It added, “For several months now, inflation has returned to below two percent, within the range considered equivalent by the Swiss National Bank with price stability.”
The bank expects inflation to remain within this range over the next few years, taking into account the recent decline in inflation pressure and the real appreciation of the Swiss franc over the past year.
The Swiss National Bank stated that it would closely monitor inflation and adjust its monetary policy again if necessary to keep inflation within a range that it deems consistent with price stability.
It noted that inflation had declined since the beginning of the year, reaching 1.2 percent in February.
It emphasized that the decrease was attributed to the decline in commodity prices, with rising local service prices currently the main driver of inflation.
Only a few economists had anticipated the Swiss National Bank’s move to lower its key rates, providing a boost to industries grappling with the fallout from the franc’s appreciation.
Swiss industries experienced a slowdown in demand due to concerns about the global economic situation, exacerbated by interest rate hikes.
Export-oriented companies have been particularly affected by the strength of the Swiss franc, which remains high compared to the euro and the US dollar, although it has declined somewhat since December.
