Swiss National Bank Holds Interest Rates for Second Consecutive Time

The Swiss National Bank has decided to keep its key interest rate at 1.75%, indicating a cautious approach to inflation and economic uncertainties.

The Swiss National Bank (SNB) has announced that it will be maintaining its key interest rate at 1.75% for the second consecutive time, signaling a pause in interest rate hikes. This decision comes as the central bank aims to closely monitor inflationary pressures and uncertainties in the economy.

In its latest monetary policy decision on Thursday, the SNB highlighted a slight decrease in inflationary pressure over the last quarter. Despite this, the central bank emphasized that uncertainty remains high and stated that it will continue to monitor developments closely. The SNB also expressed its readiness to adjust monetary policy "if necessary" to ensure price stability in the medium term.

Notably, the possibility of further monetary policy tightening was not explicitly mentioned in the latest communiqué. However, the SNB reaffirmed its preparedness to intervene in the foreign exchange market if needed. This marks a shift from the central bank's previous stance, as it had previously implemented five successive interest rate increases before the recent pause.

The decision to maintain the current interest rate comes in the wake of a slight decrease in inflation in Switzerland, with the rate falling to 1.4% and returning to the SNB's target range of 0 to 2%. This development suggests that the central bank's efforts to curb inflationary pressures have been effective.

The SNB's decision to extend its interest rate pause aligns with similar moves by other central banks, such as the US Federal Reserve, which also announced an extension of its interest rate pause. Additionally, the European Central Bank is expected to follow suit with its own interest rate decision.

The SNB's decision to maintain its key interest rate reflects a cautious approach to monetary policy in light of ongoing uncertainties and a slight decrease in inflationary pressure. The central bank's commitment to closely monitoring developments and adjusting policy as needed underscores its dedication to ensuring price stability in the medium term.