SNB hikes interest rates by 75 basis points

The Swiss Central Bank raised interest rates Thursday, September 22, by 75 basis points for the second time in a row during the third quarter of 2022, to levels of 0.5% from -0.25%.

The rise came by 75 basis points to -0.25% on June 16, which was the first rate increase in 15 years, and before that, the Swiss Central Bank had kept interest rates steady at -0.75% since 2015.

Inflation in Switzerland is currently at its highest rate in three decades, reaching 3.5% last month.

It comes after inflation in Switzerland hit 3.5% last month — its highest rate in three decades.

The bank said raising the policy rate was “countering the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected.”

It added that further policy rate increases “cannot be ruled out.”

According to a Reuters poll, the hike is in line with economist expectations.

The Swiss franc dramatically weakened against the dollar and euro following the rate hike. At 9:15 a.m. London time, the dollar was 1.24% higher against the Swiss currency, and the euro was 1.6% higher.

Earlier this week, the Swiss franc hit its strongest level against the euro since Jan. 2015, as economists started to speculate about the prospect of a 75 basis points increase.