The Swiss National Bank (SNB) has decided to send a clear signal regarding monetary policy, in the face of slowing inflation. The central bank has lowered its key rate by 50 basis points, bringing it to 0.5% compared to 1% so far, it said on Thursday.
“Inflationary pressure has again decreased compared to the previous quarter,” explains the SNB in its press release and thus justifies the marked decline in this important indicator. From 1.1% in August, inflation rose to 0.7% in November, recall the central bankers, who emphasize that the slowdown is observed in goods and services. Inflation remains mainly driven by the Swiss services sector.
As usual, the SNB reiterates that it is ready to intervene in the currency market if necessary, in order to guarantee monetary stability.
This is the first monetary policy announcement from the SNB in the era of Martin Schlegel, who has assumed the role of chairman of the board of directors of the Swiss central bank since October 1.
>> To reread: Reassured about inflation, the Swiss National Bank further lowers its key rate
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The SNB moderates its inflation forecasts
The Swiss National Bank also revised its inflation forecasts downward during its quarterly monetary policy review. Price inflation should slow to 1.1% (1.2%) over the year which ends, to decline to 0.3% (0.6%) in 2025 before rebounding to 0.8% in 2026. These projections are calculated on the basis of a key rate maintained at 0.50%.
On the growth front, the BNS experts are sticking to an estimate of around 1% for the current financial year, and moderating that for 2025 between 1% and 1.5% instead of around 1.5% in September.
