Swiss National Bank Cuts Interest Rates Amid Inflation Control

The Swiss National Bank (SNB) reduced its interest rates by 25 basis points, marking its third reduction this year. The move aligns with actions by the European Central Bank and U.S. Federal Reserve. The policy rate is now at 1.00%, following the taming of inflation and a strong Swiss franc.

The Swiss National Bank cut interest rates by 25 basis points on Thursday, its third reduction this year. This move mirrors similar steps by the European Central Bank and the U.S. Federal Reserve to lower borrowing costs.

The SNB's policy rate has dropped to 1.00%, the lowest level since early 2023, as anticipated by 30 of 32 analysts in a Reuters poll. Markets had priced in a 55% chance of a 25 basis point cut before the decision.

This rate cut marks the final decision in the 12-year tenure of SNB Chairman Thomas Jordan. The easing of monetary policy has been enabled by the successful control of inflation in Switzerland, which slowed to 1.1% in August. The inflation rate has remained within the central bank's 0-2% target range for the past 15 months.

Recent appreciation of the Swiss franc has added challenges for the country's exporters. The currency surged to its highest level against the euro in nine years, further complicating the economic landscape. The SNB noted that further rate cuts might be necessary in the coming quarters to maintain price stability over the medium term.

(With inputs from agencies.)