Swiss National Bank cuts interest rates to 1.25% amid low inflation

Swiss National Bank (SNB) again lowered the primary interest rate on Thursday. The cut was once again 25 basis points, bringing it down to 1.25 percent. The decision is in line with market expectations. The inflation reading may have influenced this decision.

The Swiss central bank made its decision on Thursday. It lowered interest rates by 25 basis points, so the primary interest rate is now 1.25 percent.

The decision matched the forecasts. Economists had expected a 0.25 percentage point cut in the interest rate to 1.25 percent. A quarter ago, the SNB made the first reduction in the cost of money in a long time, lowering the rate by 0.25 percentage points to 1.5 percent.

Today's decision is thus the second consecutive move by the Swiss National Bank toward easing monetary policy after a period of keeping rates unchanged.

PKO BP experts wrote before the data was published that the Swiss SNB's decision was not obvious. Market expectations suggested the possibility of either stabilization or another 25 basis point cut to 1.25 percent. "We lean towards the latter scenario, among other reasons, based on low inflation and the recent strengthening of the franc," they wrote.