Swiss National Bank Lowers Policy Rate Amid Easing Inflation

The Swiss National Bank has reduced its main policy rate by a quarter of a percentage point to 1.25%, citing a decrease in underlying inflationary pressure. This marks its second rate cut this year, following a similar move in March. Inflation in Switzerland is being driven by higher prices for domestic services.

In a strategic move to address easing inflation, the Swiss National Bank has announced a reduction of its main policy rate by a quarter of a percentage point, lowering it to 1.25%. This decision comes despite rising costs in sectors such as rents, tourism services, and oil products.

Effective from Friday, this adjustment follows a surprising quarter-point cut in March. For months, major central banks have been tightening monetary policy to tackle inflation by making borrowing more expensive, curbing economic activity, and controlling price rises.

Reports from the Swiss National Bank indicate that global economic growth was robust in early 2024, with inflation staying above targets in many regions but showing signs of slight easing in underlying pressures. The bank also noted that geopolitical tensions might continue to affect global economic activities.

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