Swiss National Bank Slashes Interest Rates Amid Cooling Inflation

The Swiss National Bank (SNB) reduced interest rates by 25 basis points, aligning with the European Central Bank and U.S. Federal Reserve in lowering borrowing costs. This cut, the lowest since early 2023, reflects successful inflation control. Outgoing SNB Chairman Thomas Jordan hinted at possible further cuts to maintain price stability.

The Swiss National Bank (SNB) took a decisive step on Thursday, cutting its interest rates by 25 basis points, emulating similar moves by the European Central Bank and the U.S. Federal Reserve. This reduction, bringing the SNB's policy rate to 1.00%, the lowest since early 2023, was widely anticipated by market analysts.

This marks the SNB's third rate cut of the year, a strategic move aimed at mitigating inflationary pressure. The decision concludes the 12-year tenure of SNB Chairman Thomas Jordan, who credited the slowed inflation rate of 1.1% in August for enabling such monetary easing. He indicated that further cuts might be on the horizon to ensure medium-term price stability.

Incoming SNB Chairman Martin Schlegel echoed this sentiment, highlighting the likelihood of additional rate reductions as inflation continues to decrease. Schlegel pointed out that while there's no formal commitment, prevailing monetary conditions could necessitate another cut in December. Despite the challenges posed by a strong Swiss franc, the SNB remains a leader among central banks in lowering borrowing costs.

(With inputs from agencies.)