Swiss National Bank Drops Interest Rates to Zero Amid Economic Challenges
The Swiss National Bank reduced its interest rate to zero, responding to decreasing inflation, pressure on the Swiss franc, and economic uncertainty driven by U.S. trade policy. This marks the SNB's sixth consecutive rate cut, hinting at a possible return to negative interest rates last seen between 2014 and 2022.
The Swiss National Bank (SNB) has lowered its interest rate to zero, a decision influenced by shrinking inflation, an appreciating Swiss franc, and economic instability spurred by the U.S. administration's erratic trade strategies.
The SNB's move to cut the policy rate by 25 basis points from 0.25%, anticipated by market analysts and a Reuters survey, marks its sixth straight rate reduction since March 2024. This strategic shift aims to manage borrowing costs effectively amid global economic uncertainties.
With this latest development, the central bank is teetering on the edge of reverting to negative interest rates, a controversial policy it last implemented from 2014 to 2022, which was met with resistance from banks, savers, and insurance firms.
(With inputs from agencies.)
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