Swiss National Bank (SNB), the central bank of Switzerland.
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The Swiss National Bank raised its interest rate for the first time in 15 years on Thursday, joining other central banks in tightening monetary policy to fight rising inflation and sending the franc asylum sharply higher.
The central bank raised its interest rate to -0.25% from the level of -0.75% it has been applying since 2015. The increase was the first increase by the SNB since September 2007.
The move followed a 0.75% rise in US Federal Reserve interest rates on Wednesday, while the European Central Bank signaled last week that it would raise interest rates in July to prevent rising inflation in the eurozone, which reached 8.1% last year. month.
“Tighter monetary policy aims to prevent inflation from spreading to more goods and services in Switzerland. “It cannot be ruled out that in the foreseeable future, further increases in the SNB’s interest rate will be needed to stabilize inflation in the range of price stability over the medium term,” the statement said.
“In order to ensure proper monetary conditions, SNB also wants to be active in the foreign exchange market, if necessary.
The strength of the asylum franc has reduced the impact of inflation in Switzerland by reducing rising fuel and food import prices.
However, the SNB raised its inflation forecast for 2022 to 2.8% from 2.1% in March. It also expects inflation of 1.9% and 1.6% in 2023 and 2024, respectively, compared to its previous view of rising prices by 0.9% in both years.
SNB still expects the Swiss economy to grow by about 2.5% in 2022.
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