SNB: SNB cuts key interest rate by 0.25%

The SNB lowers its key interest rate by 0.25 percentage points to 0.25%. The central bank justifies today's interest rate cut with weak inflationary pressure and increased downside risks. "The SNB will continue to monitor the situation closely and adjust its monetary policy if necessary to ensure that inflation remains within the price stability range in the medium term." The SNB's fifth interest rate cut is in line with general expectations, but there were also warnings of a surprise beforehand.

As the SNB writes in its explanatory statement, inflation has recently developed as expected. It fell from 0.7% in November to 0.3% in February. The new inflation forecast has hardly changed compared to December. It averages 0.4% for 2025, 0.8% for 2026 and 0.8% for 2027. Global economic growth will remain moderate over the next few quarters and the underlying inflationary pressure should continue to gradually ease over the next few quarters, particularly in Europe. However, the SNB also points to geopolitical uncertainty factors.

For Switzerland, the SNB expects GDP growth of between 1 and 1.5% for the current year and 1.5% for 2026. However, the economic outlook for Switzerland has become much more uncertain. (aw)