While many central banks, such as the US Fed and the Bank of England, are holding off on rate cuts, the Swiss National Bank (SNB) is diving in. On 20 March 2025, the SNB cut its interest rate by a further 0.25 percentage points to 0.25%. The rate hasn’t been this low since September 2022, two and a half years ago.
The SNB signalled that it was lowering the rate to deter inflows into the Swiss franc. Since March 2021, the franc has strengthened significantly compared to the euro. Back then one franc cost 90 euro cents. Now it costs nearly 105 euro cents.
The rate cut was anticipated by a large majority of traders and economists. SNB president Martin Schlegel told the press that he does not anticipate more easing at this point. Many economists expect the current rate of 0.25% to remain until 2026.
This latest move leaves the Swiss franc with the lowest interest rate among the world’s most traded currencies. As the move was widely anticipated, the value of the franc against the euro was relatively unchanged.
The SNB’s move contrasts with the hesitancy of other central banks to further ease rates. On Wednesday, the US Federal Reserve left its rate unchanged, citing a backdrop of high uncertainty. Similarly, the Riksbank, Sweden’s central bank left its rate unchanged and said it had finished cutting. And on 20 March 2025, the Bank of England, with inflation running at 3%, kept its rate unchanged at 4.5%.
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