In surprise move, Swiss National Bank hikes interest rates for 1st time in 15 years

By Aysu Bicer

ANKARA (AA) – The Swiss National Bank (SNB) on Thursday raised its policy interest rate for the first time since 2007, a surprise move made to bolster its fight against inflation.

The bank increased the rate by 50 basis points to minus 0.25%, having kept it at a record low of minus 0.75% since 2015.

The dramatic decision came on the heels of the US Fed’s aggressive rate hike on Wednesday.

It aims to prevent “inflation from spreading more broadly to goods and services in Switzerland,” the bank said in a statement.

The bank hinted at more possible hikes, saying “it cannot be ruled out that further increases in the SNB policy rate will be necessary in the foreseeable future to stabilize inflation.”

The SNB also said it is “willing to be active in the foreign exchange market” if required.

The bank revised up its year-end inflation forecast to 2.8% from its previous projection of 2.1%.

“Inflation reached 2.9% in May and is likely to remain at an elevated level for the time being,” read the statement.

“Without today’s SNB policy rate increase, the inflation forecast would be significantly higher.”​​​​​​​