The Swiss National Bank (SNB) has kept its benchmark interest rate at zero percent, despite tightening measures from major central banks around the world.
On September 24, the SNB held a monetary policy meeting and decided to maintain the interest rate at 0%. This marks 15 months since the rate was lowered to zero in June of last year.
The SNB acknowledged that inflation has risen due to factors such as increasing international oil prices, but it believes the current interest rate is appropriate for maintaining price stability and supporting economic growth. The Swiss consumer price inflation rate increased from -0.1% year-on-year in May of last year to 0.8% in August this year, yet it remains within the SNB's target range of 0-2%.
Switzerland lowered its interest rate to zero last year in response to falling energy prices and a strong Swiss franc. Recently, the franc has weakened due to interest rate hikes by the European Central Bank (ECB) and indications of intervention in the foreign exchange market by authorities.
The SNB anticipates that inflationary pressures will continue until the fourth quarter of this year due to the franc's weakness and rising international oil prices, but it expects inflation to decline again starting next year. Under the assumption of maintaining the current interest rate, the SNB forecasts a consumer price inflation rate of 0.7% for this year and 0.8% for next year.
Market expectations suggest that the SNB is unlikely to raise interest rates next year unless there are significant economic shocks.
In contrast, other European countries using their own currencies are continuing their tightening policies. The Norwegian central bank raised its benchmark interest rate by 0.25 percentage points to 4.50% on the same day, marking the second rate increase this year following one in May.
* This article has been translated by AI.
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