Swiss Central Bank Raises Key Rate For The First Time In 15 Years

According to Bloomberg, the Swiss National Bank hiked its main rate by 50 basis points at once on Thursday, June 16, to -0.25 percent per year. The Swiss central bank has tightened monetary policy for the first time in 15 years in order to combat inflation, which is threatening to spiral out of control, the news agency reports.

Inflation in the country will be 2.8 percent in 2021, 1.9 percent in 2023, and 1.6 percent in 2024, according to the latest forecast from the watchdog. This is significantly higher than the agency’s March forecast (2.1 percent, 0.9 percent and 0.9 percent, respectively). « We do not rule out more rate rises, » central bank governor Thomas Jordan told the AFP. « … We should not underestimate the risk of excessive inflation. »

The move is a significant change from the previous policy of keeping the national currency under control. At the same time, Jordan stated that the bank wants to stay active in the currency market, taking steps to prevent undue appreciation while also being prepared to sell the franc if it weakens.

source: afp.com

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