Swiss National Bank lowered interest rates
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The Swiss National Bank (SNB) unexpectedly reduced the policy rate by 25 basis points, becoming the first central bank to reduce interest rates in developed countries.
In the statement made by SNB, it was stated that the policy rate was reduced by 0.25 basis to 1.50 percent.
It was the first interest rate cut in 9 years by the SNB, which did not act in line with the opinion of analysts who expected the interest rate to remain constant at 1.75.
Analysts had predicted that the SNB would wait until its next meeting in June 2024 to cut interest rates.
Additionally, the SNB became the first central bank to reduce interest rates in developed countries that implemented monetary tightening to counter the inflationary pressure after Covid-19.
It is noteworthy that today’s SNB’s interest rate cut comes after the ninth month in which inflation in Switzerland fell to 1.2 percent in February, and price increases occurred within the 0-2 percent target range, which the SNB defines as price stability.
“The loosening of monetary policy has been possible because the fight against inflation has been effective in the last two and a half years,” the SNB said in its statement. comment was included.
SNB stated that it decided to reduce interest rates, taking into account the appreciation of the Swiss currency.
The SNB has long been wary of allowing the Swiss franc to gain too much value against the euro because it would weaken the country’s exports to the European Union (EU).
Recalling that central banks in developed economies such as the European Central Bank (ECB) and the Fed have given signals that interest rate cuts are on the way in recent months, analysts also emphasized that the SNB’s sudden interest rate cut decision today will probably increase speculation about the timing of other interest rate reduction moves.
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