The Swiss National Bank reduced its key interest rate by 25 basis points to 1.0% in its latest meeting on Thursday, marking the third consecutive cut in a series of moves aimed at adapting to current economic conditions.
This action followed strong expectations for monetary easing, especially after Switzerland’s inflation rate came in at 1.1% last month, the lowest among G10 economies and within the Swiss National Bank’s target range of 0% to 2%.
In a related development, business surveys showed a decline in economic activity during the summer, while the unemployment rate has seen a slight increase since the first half of 2023, further justifying the need for this measure.
Out of 32 economists, 30 had predicted a 25 basis point cut, while one expected a 50 basis point reduction, and another believed interest rates would remain unchanged.
In March, the Swiss National Bank made an unexpected decision to lower rates by a quarter of a percentage point, marking its first cut in nine years. Since then, with subsequent reductions, the bank has positioned itself at the forefront of global central banks that have shifted from tightening to easing monetary policies after a period of intense efforts to curb inflation.
In parallel developments, the U.S. Federal Reserve last week announced a significant half-point rate cut, while the European Central Bank has reduced rates twice in the past three months, reflecting a global shift towards easing monetary policies.
