Swiss National Bank Raises Interest Rate to 1.5 Percent
Posted on 03/24/2023
Together with the Swiss government and financial market regulator FINMA, the Swiss National Bank (SNB) orchestrated the emergency takeover of Credit Suisse Holding AG by UBS Group AG.
Swiss inflation stands at 3.4%, far above the Swiss National Bank’s target range of 0% to 2%. On March 23, 2023, SNB raised its interest rate by 50 basis points to make the SNB rate be at 1.5%. The rate is the fourth consecutive hike.
“The latest rise in inflation is principally due to higher prices for electricity, tourism services and food. However, prices increases are now broad-based,” the SNB said in its statement. “It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term.”
Shift from Negative Interest Rates
In September 2022, SNB raised interest rates into positive territory for the first time in seven years with a 0.75% hike. The SNB first imposed a negative rate of -0.75% in 2015 when it was forced to exit a policy of defending the Swiss franc with a peg to the euro.