The Swiss National Bank raised interest rates for the first time in seven years and said it could not rule out further increases in the future to curb inflation.
On Thursday, the Swiss National Bank unexpectedly raised interest rates by 50 basis points, raising the government demand deposit rate to -0.25%, compared with market expectations of 0.75%.It was also the SNB’s first rate hike in seven years.
In its official statement, the SNB said the tight monetary policy was aimed at preventing inflation from spreading more widely to Swiss goods and services.
In order to ensure appropriate monetary conditions, the CENTRAL bank is also willing to actively participate in the foreign exchange market when necessary.
The SNB stressed that it does not rule out the need for further increases in the central bank’s policy rate in the foreseeable future in order to stabilize inflation in a range consistent with price stability over the medium term.
On the impact of the Russia-Ukraine conflict, the SNB said the negative impact on Swiss economic activity so far has been relatively small.But the conflict is most evident in rising energy prices and supply bottlenecks.Global supply bottlenecks and further rises in commodity prices could also slow growth.If energy supplies in Europe were adversely affected, the impact on the Swiss economy would be severe.
In terms of forecasts, the SNB now expects the Swiss economy to grow by around 2.5% in 2022, unchanged from March;Inflation is expected to be 2.8% in 2022, compared with the previous forecast of 2.1%;CPI is projected to be 1.9% in 2023;In 2024, it was 1.6 percent.
After the SNB decision, the dollar fell about 180 points against the Swiss franc USD/CHF in the short term, losing 0.98, down 1.38 percent on the day.