SNB Lowers Interest Rates by 25 Basis Points for Third Time in 2023, According to Reuters

By John Revill

ZURICH (Reuters) – The Swiss National Bank (SNB) announced a 25 basis point reduction in interest rates on Thursday, marking its third cut this year. This move aligns with similar actions taken by the European Central Bank and the U.S. Federal Reserve to lower borrowing costs.

With this adjustment, the SNB’s policy rate now stands at 1.00%, the lowest level since early 2023, a decision anticipated by 30 out of 32 analysts polled by Reuters. Prior to the announcement, markets had assigned a 55% likelihood to the rate cut.

This decision comes during the final stages of SNB Chairman Thomas Jordan’s 12-year tenure and is attributed to a decline in inflation within Switzerland, which slowed to 1.1% in August and has remained within the central bank’s targeted range of 0-2% for the past 15 months.

In recent weeks, the Swiss franc has appreciated significantly, reaching its highest value in nine years against the euro in early August. This strengthening currency poses challenges for Swiss exporters.

The SNB stated, "The easing of monetary policy today reflects the decrease in inflationary pressures. Additional rate cuts may be necessary in the coming quarters to maintain price stability in the medium term."