Swiss National Bank cuts rates

Source: Dukascopy Bank SA
On 20 March 2025, the Swiss National Bank (SNB) lowered its policy rate by 0.25% to 0.25%, effective 21 March 2025. This change applies to sight deposits at the SNB, where banks will earn interest at this rate up to a certain limit and 0% above that. The SNB is also ready to act in the foreign exchange market if needed. The rate cut is due to low inflation and risks of falling inflation. Inflation dropped from 0.7% in November to 0.3% in February, mainly because of lower electricity prices.



The SNB's inflation forecast is 0.4% in 2025, 0.8% in 2026, and 0.8% in 2027. Globally, economic growth was moderate at the end of 2024, and inflation rose in many countries due to energy prices. The SNB expects global growth to stay moderate, with inflation easing, especially in Europe. In Switzerland, the economy grew well in Q4 2024, with a slight rise in unemployment. The SNB expects GDP growth of 1% to 1.5% in 2025 and about 1.5% in 2026, with domestic demand supported by higher wages and lower interest rates, although global trade might slow down. The SNB will keep monitoring the situation and adjust its policy if needed to keep inflation stable.

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