Swiss National Bank's Historic Interest Rate Cut

The Swiss National Bank reduced its interest rate by 50 basis points to counter economic concerns and stabilize the Swiss franc. This decision, the most significant cut in nearly a decade, was influenced by weak inflation and marks the SNB's first major move under Chairman Martin Schlegel.

The Swiss National Bank (SNB) has implemented its largest interest rate cut in almost 10 years, reducing the rate by 50 basis points. The move aims to stay ahead of anticipated rate cuts by other central banks and mitigate the rise of the Swiss franc.

In a survey conducted by Reuters, over 85% of economists expected a smaller cut of 25 basis points; however, the market anticipated the more aggressive 50-point reduction. This substantial decrease follows the SNB's last significant rate cut in January 2015, post-termination of its euro minimum exchange rate policy.

Thursday's decision marked a departure from the practices of former Chairman Thomas Jordan and was facilitated by the low Swiss inflation rate, presently at 0.7%. New Chairman, Martin Schlegel, indicated the measure responds to decreased inflationary pressures and emphasized the bank's commitment to maintaining price stability.

(With inputs from agencies.)