To everyone’s surprise, the Swiss National Bank (SNB) decided on Thursday to lower its key interest rate to 1.5%. This rate had been fixed at 1.75% since June 2023, the Swiss central bank having opted for the monetary status quo in September and December.
The SNB is thus initiating a phase of monetary easing earlier than its larger counterparts – the US Federal Reserve (Fed) and the European Central Bank (ECB). The aim was not to be first or last, but to take a decision at the “right time” for Switzerland, said the institution’s President, Thomas Jordan.
Inflation in Switzerland has been falling steadily in recent months, dropping from 1.7% in December to 1.3% in January and 1.2% in February. Consumer prices are therefore well within the SNB’s price stability target of 0% to 2%. This is considerably less than the 2.6% recorded in the eurozone in February and the 3.2% recorded in the USA in the same month.
The SNB is also optimistic about future price trends. It expects inflation to reach 1.4% this year, compared with 1.9% previously. But “uncertainty remains relatively high. That’s why we will continue to monitor inflation developments closely and, if necessary, adjust our monetary policy further”, warned Thomas Jordan.
Source: Swissinfo
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