Swiss National Bank slashes interest rate to 0% as inflation turns negative
Listen to article
The Swiss National Bank (SNB) reduced its key interest rate to 0% on Thursday, citing a decline in inflation, pressure from a stronger Swiss franc, and uncertainty fuelled by US trade policies.
This marked the sixth consecutive rate cut since March 2024, bringing the benchmark down from 0.25%.
The move comes after inflation in Switzerland turned negative in May for the first time in four years, falling outside the SNB's 0–2% target range.
Did you know?
Switzerland just cut its interest rate to 0%. With inflation turning negative and the franc strengthening, the SNB is moving closer to negative territory again. Next meet in September again pic.twitter.com/oNZ8Au9mt8 — Nikhil Oswal 🇮🇳 (@MrFinterest) June 19, 2025
The SNB said its decision aims to 'counter the lower inflationary pressure' observed over the last quarter.
The central bank also acknowledged it may resume negative interest rates — a policy last employed between 2014 and 2022 — if economic conditions worsen further.
SNB Chairman Martin Schlegel noted that negative rates would not be adopted lightly due to their impact on banks, pension funds, and savers.
He added that future policy decisions would depend on developments in the global economy, with the next review expected in September.
Analysts said the move was driven by the franc's appreciation, which has gained roughly 11% against the U.S. dollar in 2025, lowering the cost of imports and thus inflation.
Economists warned that continued currency strength could undermine exporters and weigh on growth.
The SNB also flagged global economic risks, particularly from rising trade tensions following sweeping U.S. tariffs introduced by President Donald Trump earlier this year.
While the SNB reiterated its readiness to intervene in foreign exchange markets if needed, it also remains wary of being labelled a currency manipulator.
The rate cut places the SNB among several global central banks easing monetary policy amid weakening growth.
Norway's central bank also made its first rate cut in five years on Thursday, while the European Central Bank lowered rates earlier in June.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 days ago
- Business Recorder
European shares edge up as US stalls its Middle East moves
European stocks snapped a three-day losing streak and closed higher on Friday, as investors' nerves eased following a stall in U.S. involvement in Middle East tensions. The pan-European STOXX 600 closed 0.1% higher. As Israel and Iran's air conflict entered its second week, European officials worked to bring Tehran back to diplomatic negotiations as Iranian Foreign Minister Abbas Araqchi arrived in Geneva for talks. The White House signalled President Donald Trump will decide within two weeks whether to throw U.S. support behind Israel in the ongoing conflict, a move that buoyed market sentiment and reignited some appetite for risk assets, which had been battered earlier in the week amid uncertainty over the conflict's duration. Despite Friday's modest gains, European stocks logged a second consecutive week of losses, as investors continued to fret over the potential global fallout from unrest in the Middle East. 'The uncertainty around the conflict means the risk of energy prices being higher,' said Franziska Palmas, senior Europe economist at Capital Economics. She added that higher energy prices could prompt the European Central Bank 'to keep rates at their current level rather than cutting them further.' European shares dive as Mideast tensions, US involvement fears weigh With the July 8 U.S. tariff-pause deadline looming, movement on trade deals with Washington has shown little progress, save for a formal agreement reached with London. European Commission President Ursula von der Leyen remains hopeful for a broader deal by July 9. Meanwhile, BofA Global Research raised its year-end target for the STOXX 600 to 530 from 500 on resilience in global growth following a U.S.-China trade deal. Travel and leisure stocks were up nearly 1%, led by a 6.5% gain in Europe's largest travel operator TUI after Barclays upgraded the stock to 'overweight'from 'underweight'. Energy shares lagged 0.6% as oil prices retreated, though the sector was the week's second-biggest gainer due to Middle East tensions that had boosted crude prices earlier. On the day, the insurance sector emerged as the top sectoral gainer, up 1.3%. Among other stocks, London's Berkeley was the biggest percentage decliner, down 8.1%. The homebuilder named current finance chief Richard Stearn as its new CEO, but reported an annual pre-tax profit slightly ahead of market expectations. Stora Enso jumped 14.7% to the top of the STOXX 600 after the Finnish forestry group announced a strategic review of its Swedish forest assets worth EUR 5.8 billion, including potential separation and public listing. Markets in Sweden and Finland were closed for a public holiday.
Business Recorder
3 days ago
- Business Recorder
Govt launches Rs180mn Skardu International Airport upgrade project
The government has formally launched the upgrade project of Skardu International Airport, marking a key milestone in strengthening air connectivity and unlocking the economic potential of Gilgit-Baltistan. The formal launch event took place at a local resort in Skardu, where the joint venture consultancy, comprising Swiss firm Intairplan and its Pakistani partners, presented their strategic roadmap for the airport's development. Australian HC team assesses Skardu Int'l Airport Senior officials from the Pakistan Airports Authority (PAA) attended the meeting, including the Director Planning & Development, the Additional Director Project Monitoring, Project Director Skardu International Airport, and the Airport Manager Skardu. Reforms in aviation sector reviewed: PM for further improvement in facilities at airports Representatives from the local administration, armed forces, law enforcement agencies, and other stakeholder institutions were also present. According to officials, the design consultancy for the upgrade has been awarded at a cost of Rs180 million. Construction work is expected to begin within a year, following the completion of the detailed design and PC-1. Stakeholders expressed unanimous support for the project and commended the PAA's efforts in positioning Skardu as a hub for international tourism and trade. The project is expected to boost regional development by enhancing air connectivity and enabling broader economic integration. The Skardu International Airport Upgrade Project is being hailed as a transformative step toward promoting sustainable growth and global accessibility in the mountainous region of Gilgit-Baltistan.
Business Recorder
3 days ago
- Business Recorder
Govt launches Skardu International Airport upgrade project
The government has formally launched the upgrade project of Skardu International Airport, marking a key milestone in strengthening air connectivity and unlocking the economic potential of Gilgit-Baltistan. The formal launch event took place at a local resort in Skardu, where the joint venture consultancy, comprising Swiss firm Intairplan and its Pakistani partners, presented their strategic roadmap for the airport's development. Australian HC team assesses Skardu Int'l Airport Senior officials from the Pakistan Airports Authority (PAA) attended the meeting, including the Director Planning & Development, the Additional Director Project Monitoring, Project Director Skardu International Airport, and the Airport Manager Skardu. Reforms in aviation sector reviewed: PM for further improvement in facilities at airports Representatives from the local administration, armed forces, law enforcement agencies, and other stakeholder institutions were also present. According to officials, the design consultancy for the upgradation has been awarded at a cost of Rs180 million. Construction work is expected to begin within a year, following the completion of the detailed design and PC-1. Stakeholders expressed unanimous support for the project and commended the PAA's efforts in positioning Skardu as a hub for international tourism and trade. The project is expected to boost regional development by enhancing air connectivity and enabling broader economic integration. The Skardu International Airport Upgradation Project is being hailed as a transformative step toward promoting sustainable growth and global accessibility in the mountainous region of Gilgit-Baltistan.
