Geneva: The Swiss National Bank (SNB) today raised its benchmark interest rate by 75 basis points to stand at 0.5%, a shift that away from negative rates, according to the CNBC News.
The 75 basis point hike follows an increase to -0.25% on 16 June, which was the first rate rise in 15 years. Prior to this, the Swiss central bank had held rates steady at -0.75% since 2015.
It comes after inflation in Switzerland hit 3.5% last month — its highest rate in three decades.
The bank said raising the policy rate was “countering the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected.”
It added that further policy rate increases “cannot be ruled out.”
The hike is in line with economist expectations, according to a Reuters poll.
Switzerland had been the last remaining country in Europe with a negative policy rate as the region’s central banks have been aggressively increasing rates to tackle soaring inflation.
Japan is now the last major economy with a central bank in negative territory, after the Bank of Japan decided to keep its interest rates on hold at -0.1% today.
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