The Swiss National Bank cut its policy interest rate by 25 basis points to 1.00% on 26 September 2024, delivering the third consecutive quarterly reduction of the year.
The central bank cited two principal factors behind the move: a continued moderation in domestic inflation and the persistent strength of the Swiss franc.
INFLATION AND THE FRANC
The SNB's mandate requires it to ensure price stability while taking account of economic developments, and policymakers judged at the September meeting that inflation had moderated sufficiently to allow further removal of monetary restriction.
At 1.00%, the policy rate is above the negative territory in which it resided for much of the period between 2015 and 2022. During that era, the SNB held rates at minus 0.75% and intervened extensively in foreign-exchange markets to prevent the franc from appreciating sharply against the euro.
The SNB said further cuts in its policy rate may become necessary in the coming quarters to ensure price stability over the medium term.
OUTLOOK FOR SWISS MONETARY POLICY
The SNB holds quarterly monetary policy assessments, meaning the next scheduled opportunity to adjust rates falls in December 2024.