Swiss National Bank raises interest rate by 50 basis points
2023.03.23 05:11
© Reuters. FILE PHOTO: The Swiss National Bank (SNB) building is seen near the Limmat river in Zurich, Switzerland March 23, 2023. REUTERS/Denis Balibouse
By John Revill
ZURICH (Reuters) – The Swiss National Bank raised its policy interest rate by 50 basis points on Thursday as the central bank sought to balance tackling inflation with concerns about financial market turmoil.
The Swiss central bank said that additional rate rises could not be ruled out and that it was willing to be active in the foreign exchange market if necessary.
The increase was the SNB’s fourth rate hike in succession as the central bank maintained its fight against Swiss inflation, which remains stubbornly outside the SNB’s target band of 0-2%.
The hike was in line with the majority of economist forecasts according to a Reuters poll and showed how tackling inflation – currently running at 3.4% – outweighed its concerns over financial market turmoil.
“The growth outlook for the global economy in the coming quarters remains subdued,” said the SNB in a statement. “At the same time, inflation is likely to remain elevated worldwide for the time being.”
The Swiss move matched the European Central Bank’s (ECB) 50 basis point increase last week.
The U.S. Federal Reserve on Wednesday raised its main interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases.
The Bank of England is expected to increase its interest rate by a quarter percentage point later on Thursday.
