Switzerland becomes 1st major economy to cut interest rates

By Tuba Ongun

The Swiss National Bank (SNB) on Thursday cut its main interest rate, making it the first major economy to start easing monetary policy.

The policy rate was cut 25 basis points to 1.50%, the first such move by the SNB in nine years, according to a bank statement about the surprise move.

"The easing of monetary policy has been made possible because the fight against inflation over the past two-and-a-half years has been effective," read the statement.

Switzerland's annual inflation rate slowed to 1.2% in February, the lowest reading since October 2021, according to the Swiss Federal Statistical Office.

The bank projects the inflation rate will likely remain below 2% over the next few years.

The SNB has cut its average inflation forecast to 1.4% this year and 1.2% next year.

Central banks of the US, EU, Canada, Australia and New Zealand kept the rate constant at their last meetings while Japan made a rate hike on Wednesday. The Bank of England is set to release its rate decision later Thursday.