On June 19, 2025, the Swiss National Bank reduced its key interest rate to 0%, marking a return to zero interest rate policy after six consecutive cuts. This decision reflects deflationary pressures and aims to stimulate borrowing and investment.
Consumer prices fell by 0.1% in May 2025, influenced by declines in tourism and oil prices. The SNB expects average annual inflation to remain low at 0.2% for 2025, highlighting the economic challenges ahead.
The SNB’s zero-rate policy could signal other advanced economies to adopt similar measures. The bank is prepared to intervene in foreign exchange markets to manage the franc’s strength, reflecting on market stability in the context of global economic conditions.
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