On 21 March 2024, the Swiss National Bank (SNB) lowered its key interest rate from 1.75% to 1.5%.
The move makes the SNB the first significant central bank to lower rates as inflation slows. The cut surprised many analysts and economists. The consensus expectation was for no change in the rate.
Many other central banks have left rates unchanged. On 20 March 2024, the US Fed decided to maintain the target range for the federal funds rate at 5.25% to 5.5%. And on 21 March 2024, the Bank of England decided to maintain its rate at 5.25%.
According to a press release, the SNB said that the fight against inflation over the last 2.5 years had been effective and inflation had been below the target rate of 2% for several months. In addition, it said that cutting the rate would support economic growth and development.
Before June 2022, the interest rate was -0.75%. Since then it rose to 1.75% after five rate hikes before being cut to 1.5% on 21 March 2024.
Annual inflation in Switzerland was 1.2% in February 2024.
The Swiss franc lost 1-2% of its value against key currencies in response to the rate cut.
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SNB press release (in French) – Take a 5 minute French test now
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