Swiss Central Bank Cuts rate By 0.25%

The SNB explained in a communiqué on Thursday that inflationary pressure in Switzerland had once again fallen significantly compared to the previous quarter. The Swiss interest rate adjustment follows a 0.5% cut by the United States Federal Reserve last week.

Further interest rate cuts may be necessary in the coming quarters in order to ensure price stability in the medium term, said the central bank on Thursday. The Swiss central bank has reduced its inflation forecast to 1.2% this year and 0.6% in 2025, which is lower than the 1.3% and 1.1% predictions in June. At the same time, the SNB is still prepared to be active on the foreign exchange market if necessary to defend the Swiss franc against appreciation.

GDP Growth is likely to remain rather modest in Switzerland in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy,” the SNB stated, as it forecast 1% economic growth this year. The SNB had already lowered the key interest rate by 0.25 percentage points in both March and June.

⎪The Swiss National Bank has cut interest rates by 0.25%, lowering the policy rate to 1%. echoing steps to lower borrowing costs by the European Central Bank and U.S. Federal Reserve, and left the door wide open for more rate cuts as inflation cools sharply. The SNB cut its policy rate to 1.00%, the lowest level since early 2023, as expected by analysts in a Reuters poll. The cut was its third such reduction this year as the central bank dialled back measures designed to combat inflation.⎪