The Swiss National Bank (SNB) raised its benchmark sight deposit interest rate by 50 basis points (bps) to 1.0% from 0.50% previous, as widely expected.
At the December policy meeting, the SNB hiked rates for the third consecutive meeting, summing up to a total of 175 bps of rate increases this year.
Summary of the statement
In doing so, it is countering increased inflationary pressure and a further spread of inflation.
It cannot be ruled out that additional rises in the snb policy rate will be necessary to ensure price stability over the medium term.
To provide appropriate monetary conditions, the snb is also willing to be active in the foreign exchange market as necessary.
SNB sees 2022 swiss growth at around 2% vs sept forecast for growth around 2%.
SNB sees 2023 swiss growth at around 0.5%.
SNB sees Q3 2025 inflation at 2.1%.
Will remain active in foreign exchange markets as necessary.
It cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability over the medium term.
To provide appropriate monetary conditions, the SNB is also willing to be active in the foreign exchange market as necessary.
Sight deposits held at the SNB will be remunerated at the snb policy rate of 1.0% up to a certain threshold.
Sight deposits above this threshold will be remunerated at an interest rate of 0.5%, and thus still at a discount of 0.5 percentage points relative to the SNB policy rate.
Numerous central banks have further tightened their monetary policy; in its baseline scenario for the global economy, the SNB expects this challenging situation to persist for now.
In an initial reaction to the SNB rate hike decision, the USD/CHF pair jumped to fresh daily highs near 0.9300, up 0.52% on the day.
About SNB Rate Decision
The Swiss National Bank conducts the country’s monetary policy as an independent central bank. It is obliged by the Constitution and by statute to act in accordance with the interests of the country as a whole. Its primary goal is to ensure price stability, while taking due account of economic developments. In so doing, it creates an appropriate environment for economic growth.
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