Swiss National Bank Cuts Interest Rate

The Swiss National Bank cut its key interest rate by 25 basis points to 1.0% on Thursday, marking its third consecutive reduction.

The Swiss central bank was widely expected to ease monetary policy as the country’s inflation rate recorded 1.1% last month, the slowest among G10 economies and nearly at the midpoint of the SNB’s 0%-2% target range.

Business surveys indicate weak economic activity over the summer, and unemployment has slightly increased since the first half of 2023.

A Reuters poll revealed that 30 out of 32 economists anticipated a 25 basis point cut, with one foreseeing a 50 basis point reduction and another predicting steady rates.

In March, the SNB implemented an unexpected quarter-point reduction, its first in nine years. The successive cuts highlight a growing global trend among central banks to reduce rates after a period of tighter policies aimed at addressing inflation.

Last week, the Federal Reserve announced a significant half-point cut, while the European Central Bank has reduced rates twice in three months.