Official announcements from the Swiss National Bank

Swiss National Bank Cuts Rate by 50 Basis Points to Manage Inflation and Franc Strength

Dec 12, 2024, 10:28 AM

The Swiss National Bank (SNB) has made a significant move by cutting its key interest rate by 50 basis points to 0.5%, marking the largest reduction in nearly a decade. This unexpected decision, which brings the rate to its lowest level since September 2022, was aimed at countering the strength of the Swiss franc and managing inflation, which has been consistently below the SNB's target range of 0-2%. The cut was larger than anticipated, with market expectations leaning towards a 25 basis point reduction. The SNB's action is part of a broader strategy to preempt similar moves by other central banks, including the European Central Bank (ECB) and the Federal Reserve, which are also expected to adjust their rates. The Swiss franc experienced a brief dip following the announcement but has since stabilized, reflecting the SNB's intent to manage currency strength without pushing inflation into negative territory.