Financial News: Swiss Central Bank Lowers Policy Rate By 25

Swiss Central Bank Lowers Policy Rate By 25 Bps

09/26/2024 - 04:05:00 (RTTNews)

(RTTNews) - The Swiss National Bank reduced its key policy rate by 25 basis points for the third straight meeting on Thursday.

The policy board lowered the policy rate to 1.0 percent from 1.25 percent, as expected.

Banks' sight deposits held at the SNB will be remunerated at the SNB policy rate up to a certain threshold, and at 0.5 percent above this threshold, the bank said.

"Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term," the bank said in a statement.

Inflation is being currently driven by higher prices for domestic services. The bank downgraded its inflation forecast citing the stronger Swiss franc, the lower oil price and electricity price cuts announced for next January.

Inflation is seen at 1.2 percent this year, down from the previous forecast of 1.3 percent. The projection for 2025 was trimmed to 0.6 percent from 1.1 percent.

For 2026, inflation is estimated at 0.7 percent compared to 1.0 percent projected in June.

The bank said economic growth is likely to remain rather moderate in Switzerland in the coming quarters due to the recent appreciation of the Swiss franc and the moderate development of the global economy.

The economic growth is projected to be around 1 percent this year, which was unchanged from the previous outlook.

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