The Swiss National Bank (SNB) has announced a reduction in its policy rate by 0.25 percentage points, bringing it to 0%. This change will take effect on June 20, 2025. The remuneration for banks’ sight deposits held at the SNB will align with the new policy rate up to a certain threshold, while the discount for deposits above this threshold remains at 0.25 percentage points.
The SNB said that it is prepared to intervene in the foreign exchange market if necessary. The decision comes as inflationary pressure has decreased since the previous quarter. “With today’s easing of monetary policy, the SNB is countering the lower inflationary pressure,” said an SNB representative.
Inflation rates have fallen further since the last assessment, dropping from 0.3% in February to -0.1% in May, primarily due to changes in tourism and oil product prices. The updated conditional inflation forecast suggests lower short-term inflation compared to March but shows little change over the medium term. The forecast anticipates average annual inflation rates of 0.2% for 2025, 0.5% for 2026, and 0.7% for 2027.
Globally, economic growth continued at a moderate pace in early 2025, though future prospects have dimmed due to rising trade tensions. The SNB expects global economic growth to weaken and notes potential increases in US inflation while anticipating further decreases in Europe.
Swiss GDP saw strong growth in the first quarter of 2025, largely driven by advanced exports to the US. However, adjusted figures show more moderate growth momentum. The SNB forecasts GDP growth between 1% and 1.5% for both 2025 and 2026, with unemployment expected to rise slightly.
The economic outlook remains uncertain due to international developments posing significant risks. Further details on this monetary policy decision are available on the SNB website.
Information from this article can be found here.
