Swiss National Bank Raises Rates to 1.5% After Credit Suisse Fallout
By Ed Frankl
Switzerland's central bank on Thursday increased interest rates
for a fourth consecutive time, seeking to curb stubbornly high
inflation relative to historic levels, as the country deals with
the turmoil in its key banking sector after the takeover of Credit
Suisse Group AG.
The Swiss National Bank increased its policy rate by 50 basis
points, to 1.5%, equaling its half-point increase at its prior
It comes after Swiss inflation came in at 3.4% in February,
accelerating from 3.3% in January, and above the SNB's target of
between 0% and 2%.
The SNB said the rate rise was countering the renewed increase
in inflationary pressure, and couldn't rule out additional rises in
policy rates to ensure price stability over the medium term.
Still, Swiss inflation is well below that of the eurozone, where
inflation was 8.5%.
The decision comes after the takeover of Credit Suisse by its
crosstown rival UBS Group AG, with the central bank providing large
amounts of liquidity assistance in an effort to halt uncertainty in
The SNB said measures announced by the government, market
regulator Finma and the bank had put a halt to the crisis.
Meanwhile, the central bank said inflation is likely to remain
elevated, with forecasts now higher than previous ones made in
In its new inflation forecasts, the SNB puts average annual
inflation at 2.6% for 2023, and 2.0% for 2024 and 2025. Overall,
the country's gross domestic product is likely to increase by a
modest 1% this year, it added.
Write to Ed Frankl at email@example.com
(END) Dow Jones Newswires
March 23, 2023 05:02 ET (09:02 GMT)
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