February 25, 2024

MediaBizNet

Complete Australian News World

Swiss central bank raises interest rates by 50 basis points to counter 'inflation'

Swiss central bank raises interest rates by 50 basis points to counter ‘inflation’

The Swiss National Bank raises interest rates again.

FABRICE COFFRINI / Contributor / Getty Images

The Swiss National Bank raised its benchmark interest rate on Thursday for the third time this year, to 1%.

The central bank said it was looking forward to countering “increasing inflationary pressure and increasing inflationary spread” with the move.

Inflation in the country remains well above the SNB’s 0-2% target, but notably below the high. rates of neighboring European countries. Switzerland’s inflation rate held steady at 3% last month, having fallen from a three-decade high of 3.5% in August.

The central bank’s 50 basis point hike on Thursday came after it unexpectedly raised interest rates For the first time in 15 years In June, I take it from -0.75% to -0.25%. Then I entered positive territory An increase of 75 basis points on Sept. 22.

And there may be more hikes on the horizon.

“It cannot be ruled out that further increases in SNB policy will be necessary to ensure price stability in the medium term,” said a press release from the central bank.

He added that “to provide adequate monetary conditions, the SNB is also ready to be active in the foreign exchange market as necessary.”

global slowdown

In announcing its recent rate hike, the SNB noted the global slowdown in growth and that inflation is “significantly above” central bank targets in many countries – and it doesn’t expect this to change anytime soon.

“The SNB expects this difficult situation to continue for the time being. Global economic growth is likely to be weak in the coming quarters, and inflation will remain high for the time being,” the press release said.

READ  Live news updates: Russian stocks, ruble rebound as peace talks boost hopes

But in the medium term, the Bank expects inflation to stabilize at more moderate levels as countries continue to tighten monetary policy.

Charlotte de Montpellier, chief economist at ING, noted that the overall SNB increase of 175 basis points in 2022 compares to an expected increase of 250 basis points in the euro area and Up 425 bps in the US.