Swiss National Bank Cuts Interest Rates to Combat Inflation




In a move aimed at curbing inflationary pressures, the Swiss National Bank (SNB) announced a reduction in interest rates by a quarter of a percentage point, bringing the key rate down to 1.5%. Thomas Jordan, the outgoing SNB chairman, attributed this decision to the central bank's successful efforts in containing inflation in the affluent Alpine nation.


Explaining the rationale behind the rate cut, Jordan highlighted the effectiveness of the SNB's monetary policy in combating inflation over the past two and a half years. He noted that inflation had remained below 2% for several months, signaling stability in price levels—a key objective for the central bank.


"With inflation back below 2%, which we consider as price stability, and with our new forecast indicating continued stability in the coming years, we have decided to ease our monetary policy," stated Jordan.


The unexpected announcement had an immediate impact on the Swiss franc, causing it to depreciate against the euro. The franc traded at 1.02 euros on Thursday, down from 1.03 euros the previous day. This shift comes after the Swiss currency reached record highs against the euro in January.


The SNB's decision to lower interest rates underscores its commitment to maintaining price stability and addressing inflation concerns. By adjusting monetary policy measures, the central bank aims to support economic growth while ensuring that inflation remains within the desired range over the medium term.







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