Monetary policy –
The SNB lowers its key rate to 0.5%
The Swiss National Bank reduces its rate by 50 points. It remains ready to intervene if necessary in the markets.
The President of the Swiss National Bank (SNB), Martin Schlegel.
KEYSTONE/Anthony Anex
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The Swiss National Bank (SNB) has decided to send a clear signal regarding monetary policy, in the face of slowing inflation. Taking observers by surprise, the issuing institute significantly lowered its key rate by 50 basis points, bringing it to 0.5% compared to 1.0% so far, it said on Thursday.
“Inflationary pressure has again decreased compared to the previous quarter,” explains the SNB in its press release on Thursday 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 increase in the cost of Swiss services.
Most economists were counting on a reduction of 25 basis points.
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 of the Martin Schlegel era, who has assumed the role of chairman of the board of directors of the Swiss central bank since October 1.
The SNB moderates its inflation forecasts
The Swiss National Bank (SNB) revised its inflation forecasts downwards on Thursday, 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%, established today following a pruning of 50 basis points, underlines the guarantor of price stability in its periodic statement.
The lowering of inflation estimates is explained by a lower than expected increase in the price of petroleum products and foodstuffs.
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 to between 1.0 and 1.5% instead of around 1.5% in September.
Press conference at 10 a.m.
The SNB will hold an end-of-year press conference on its monetary policy from 10 a.m. this Thursday.
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