Swiss National Bank cuts interest rate to zero as inflation slows
Switzerland's central bank has cut its interest rate to zero, a move that reflects a steady easing of inflationary pressure in the country.
The Swiss National Bank said in a statement on Thursday that its policy rate will be lowered from 0.25 percent after inflation dipped to minus 0.1 percent in May.
It's the bank's sixth consecutive cut since March 2024. The rate is now at the lowest since September 2022, when the bank ended a negative rate policy.
The central bank added in the statement that the outlook for the global economy faces high uncertainty. It said developments abroad represent the main risk for the Swiss economy.
The additional import tariffs imposed by the US this year triggered selling of the dollar and buying of Swiss francs as a safe haven asset. This has further lowered the cost of Switzerland's imports.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
NHK
2 hours ago
- NHK
Expert: Tokyo inflation to slow slightly
As Japanese consumers face the G7's highest inflation rates, an economist expects the Tokyo Consumer Price Index for June to show increases are slowing very slightly. He also sees prices continuing to rise at a high pace this year.
NHK
6 hours ago
- NHK
Swiss National Bank cuts interest rate to zero as inflation slows
Switzerland's central bank has cut its interest rate to zero, a move that reflects a steady easing of inflationary pressure in the country. The Swiss National Bank said in a statement on Thursday that its policy rate will be lowered from 0.25 percent after inflation dipped to minus 0.1 percent in May. It's the bank's sixth consecutive cut since March 2024. The rate is now at the lowest since September 2022, when the bank ended a negative rate policy. The central bank added in the statement that the outlook for the global economy faces high uncertainty. It said developments abroad represent the main risk for the Swiss economy. The additional import tariffs imposed by the US this year triggered selling of the dollar and buying of Swiss francs as a safe haven asset. This has further lowered the cost of Switzerland's imports.
Japan Times
7 hours ago
- Japan Times
Spain risks derailing NATO summit by resisting 5% defense spending goal
Spain has asked to opt out of NATO's plan to increase members' defense spending to 5% of their gross domestic product, a move that could derail a summit at which the military alliance plans to ask them to commit to the target. In a letter sent to NATO chief Mark Rutte on Thursday and seen by Reuters, Prime Minister Pedro Sanchez requested a "more flexible formula" that either makes the spending target optional or excludes Spain from its application. He said it was not Spain's intention to obstruct the outcome of next week's NATO summit. But any agreement to raise defense spending — a response to a request by U.S. President Donald Trump — would require unanimous approval by the 32 member states. "Committing to a 5% target would not only be unreasonable, but also counterproductive, as it would move Spain further away from optimal spending and would hinder the EU's ongoing efforts to strengthen its security and defense ecosystem," Sanchez wrote in the letter. "It is the legitimate right of every government to decide whether or not they are willing to make those sacrifices. As a sovereign Ally, we choose not to," he added. At an estimated 1.28% of GDP, Spain had the lowest proportion of expenditure on defense in the alliance last year, according to NATO estimates. Sanchez agreed in April to accelerate efforts to meet NATO's current target of 2%. Rutte has proposed that member states agree to boost defense spending to 3.5% of GDP and commit a further 1.5% to broader security-related spending. Leaders across NATO say its current spending goal is no longer sufficient, with Russia posing a greater threat since its 2022 invasion of Ukraine. Asked for comment on Spain's request, a NATO official said: "Discussions among Allies on a new defense investment plan are ongoing." The U.S., which has been Kyiv's primary military backer since Russia's invasion, spent an estimated 3.38% of GDP on defense in 2024, the third-most among NATO nations, according to the alliance. Trump has said NATO members are not spending their fair share on defense and has threatened not to come to the aid of those falling short. Sanchez, however, said that rushing to a 5% target would harm European Union efforts to become self-reliant in defense production, pushing governments to procure equipment outside the bloc and that it was "incompatible with our welfare state and our world vision." Junior coalition partners, the far-left Sumar platform, oppose any increase, as does the Podemos party, which is not part of the coalition but has supported the government in key votes. Now, a corruption scandal engulfing the prime minister's Socialist party has generated fury among coalition partners and allies, even raising the specter of an early election. "If the government needs parliamentary support to approve spending, it will have a very difficult time in the current situation," Jose Miguel Calvillo, a professor of international relations at the Complutense University of Madrid. Some other NATO members have also questioned the timeline, saying it is too rapid, but are generally willing to sign up, diplomatic sources say. Italy, for example, wants the deadline moved to 2035 from 2032 and the removal of a requirement to increase spending by 0.2% per year, a source with knowledge of the matter said. "It doesn't look good, indeed, but we are not over yet," said one senior European official in relation to Sanchez's letter. "We will have in-depth discussions tomorrow, and perhaps we find a way out. Spain has demonstrated to be a steadfast ally so far."
