{"id":31293,"date":"2025-06-19T08:34:20","date_gmt":"2025-06-19T08:34:20","guid":{"rendered":"https:\/\/financialrush.com\/?p=31293"},"modified":"2025-06-19T08:34:20","modified_gmt":"2025-06-19T08:34:20","slug":"swiss-central-bank-cuts-rates-to-zero","status":"publish","type":"post","link":"https:\/\/financialrush.com\/?p=31293","title":{"rendered":"Swiss central bank cuts rates to zero"},"content":{"rendered":"<p> \n<\/p>\n<div>\n<p>Unlock the Editor\u2019s Digest for free<\/p>\n<p class=\"article__content-sign-up-topic-description o3-type-body-base\"><span>Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/span><\/p>\n<p><iframe class=\"article__content-sign-up-iframe close\" scrolling=\"no\" id=\"signUpIframe\" data-prev-url=\"\/register\/in-article-sign-up?ft-content-uuid=42827c57-ce87-45ed-926b-9150d5976020\"><\/iframe><\/div>\n<div id=\"article-body\">\n<p>The Swiss National Bank has cut interest rates to zero but did not go so far as negative rates, as it battles to restrain its currency, which has surged on global trade tensions.\u00a0<\/p>\n<p>The quarter-point reduction on Thursday by the central bank\u2019s governing board was anticipated by economists. <\/p>\n<p>It is the first time that the Alpine country, which is one of the few globally to experiment with negative rates, has gone to an interest rate of zero as it tackles lagging inflation and a surging Swiss franc, a haven currency that investors have bought up amid US President Donald Trump\u2019s trade war.<\/p>\n<p>The Swiss franc strengthened after Thursday\u2019s expected cut, putting it flat on the day against the dollar, with the greenback at SFr0.819.<\/p>\n<p>The decision comes after annual inflation dipped to<a href=\"https:\/\/www.ft.com\/content\/c4b3cd10-58d5-4fe0-a6f0-075d6e88776d\" data-trackable=\"link\"> minus 0.1 per cent in May<\/a>, the first negative reading in four years. The appreciating Swiss franc \u2014 up 10 per cent against the dollar this year \u2014 has slashed the cost of imports, intensifying disinflationary pressure.\u00a0<\/p>\n<p>The so-called Swissie\u2019s sharp rise this year has complicated policymaking. The SNB is attempting to ease pressure without triggering accusations of currency manipulation from the US, which placed <a href=\"https:\/\/www.ft.com\/stream\/11315556-89e9-443b-b7a8-3c038f70374f\" data-trackable=\"link\">Switzerland<\/a> on a watchlist during Trump\u2019s first term.<\/p>\n<p>Analysts say rate cuts are a diplomatically safer route than direct FX intervention.\u00a0<\/p>\n<p>\u201c[The central bank] anticipates that growth in the global economy will weaken over the coming quarters,\u201d said the SNB in a statement alongside Thursday\u2019s decision. \u201cInflation in the US is likely to rise over the coming quarters. In Europe, by contrast, a further decrease in inflationary pressure is to be expected.<\/p>\n<p>\u201cInflationary pressure has decreased compared to the previous quarter. With today\u2019s easing of monetary policy, the SNB is countering the lower inflationary pressure,\u201d it added.<\/p>\n<p>Analysts at Capital Economics highlighted that there was no change in the statement\u2019s language regarding FX interventions and no mention of the franc\u2019s strength. \u201cThis supports our view that the SNB is not planning to use FX interventions as its main tool for loosening monetary policy anytime soon,\u201d they added.<\/p>\n<p>Switzerland first introduced negative interest rates in December 2014, when the <a href=\"https:\/\/www.ft.com\/stream\/e60ae25e-506c-48cd-8f4d-302cfd045d7a\" data-trackable=\"link\">SNB<\/a> set the deposit rate at minus 0.25 per cent to stem the franc\u2019s appreciation amid safe-haven inflows. <\/p>\n<p>The central bank at one stage pushed the rate down to minus 0.75 per cent, the lowest level in the world. The policy remained in place for more than seven years, also making it one of the world\u2019s longest negative rate periods until it exited it in 2022.\u00a0<\/p>\n<p>Thursday\u2019s cut creates a potentially tricky situation for Swiss banks. They no longer earn interest on their reserves with the SNB but theoretically have less justification to pass that cost on to customers.<\/p>\n<p><em>This is a developing story<\/em><\/p>\n<\/div>\n\n<br \/><a href=\"https:\/\/www.ft.com\/content\/42827c57-ce87-45ed-926b-9150d5976020\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this&hellip;\n","protected":false},"author":6,"featured_media":31294,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-31293","post","type-post","status-publish","format-standard","has-post-thumbnail","category-us","cs-entry","cs-video-wrap"],"_links":{"self":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/31293","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=31293"}],"version-history":[{"count":0,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/posts\/31293\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=\/wp\/v2\/media\/31294"}],"wp:attachment":[{"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=31293"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=31293"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financialrush.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=31293"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}