Swiss National Bank Cuts Interest Rate by 50 Basis Points to 0.50%, 4th Consecutive Cut as CHF Falls to 2-Week Low

Dec 12, 2024, 11:48 AM

The Swiss National Bank (SNB) has announced a significant interest rate cut of 50 basis points, reducing the key policy rate from 1% to 0.50%, the lowest level since September 2022. This unexpected move, described as a 'jumbo' cut, marks the fourth consecutive reduction in rates and reflects the central bank's focus on lower inflation and growth risks. The decision comes amid concerns about the strength of the Swiss franc, which briefly fell to a two-week low following the announcement. Analysts noted that this rate cut was larger than the anticipated 25 basis points and could increase the likelihood of negative interest rates in 2025, although this remains a less likely scenario. The SNB reiterated its readiness to intervene in the foreign exchange market as necessary. The central bank's revised inflation forecast for 2024 and 2025 has also been lowered, indicating a shift in its monetary policy stance.