Monetary policy – SNB increases key interest rate by 0.5 percentage points to 1 percent – News

  • The Swiss National Bank SNB continues to fight inflation and raises the key interest rate by 0.5 percentage points to 1 percent.
  • It is the third adjustment of the SNB’s key interest rate this year. Due to the last increase, the key interest rate is back in positive territory.
  • SNB President Thomas Jordan had already announced in September that further rate hikes might be necessary.

With this step, the monetary authorities want to counteract the increased inflationary pressure and a further widening of inflation, the SNB said on Thursday. In addition, it cannot be ruled out that additional interest rate hikes will be necessary to ensure price stability in the medium term.

Assessment by SRF business editor Eveline Kobler


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At 3 percent, inflation in Switzerland is significantly lower than abroad, but still too high from the point of view of the Swiss National Bank SNB. It is therefore continuing to raise its key interest rate and is not ruling out further rate hikes. In the fight against inflation, the SNB accepts that economic growth in Switzerland will continue to slow down to half a percent next year. This is understandable, because persistently high inflation is usually more painful for an economy than an economic downturn.

In mid-September, the SNB had already left an almost eight-year era of negative interest rates behind by raising its key interest rate by 0.75 percentage points. Before that, in the summer, the central bank tightened the interest rate screw by half a percentage point for the first time in fifteen years.

Since then, inflation in Switzerland has eased somewhat. In November it remained unchanged compared to the previous month at 3.0 percent. Before that, it had temporarily risen to 3.5 percent.

US Federal Reserve far ahead

The US Federal Reserve, which has raised its key interest rate several times this year, is considered one of the pioneers of the change in monetary policy, the last time on Monday. The US interest rate is now in a range of 4.25 to 4.50 percent.

The European Central Bank (ECB) is now also fighting the high inflation in the euro area with a series of interest rate hikes. Another hike is expected at the Governing Council meeting later this Thursday.

In the euro zone, inflation fell from its record level in November to just 10.0 percent. The key interest rate in the euro area is currently 2.00 percent.

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