Big surprise: The Central Bank left the interest rate unchanged at 1.75 percent

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But tightening monetary policy is enough: the Swiss National Bank does not tighten the reins any further and leaves the interest rate at 1.75 percent. Inflationary pressure has clearly diminished in Switzerland. But inflation remains a problem, especially as rising oil prices, rising energy costs for households and rents could reignite inflation.

The pause in interest rates came as a surprise because the majority of economists had expected a 25 basis point increase. SNB Chairman Thomas Jordan (60) stated that interest rates will be increased further at the last meeting in June.

There have been 5 consecutive interest rate increases, now there is a break in interest rates. The SNB’s decision explained that monetary policy, which has been tightened significantly in the last few quarters, offset the inflationary pressure that was still present. However, from today’s perspective, it cannot be ruled out that further tightening of monetary policy will be necessary to ensure price stability in the medium term.

Inflation in Switzerland has fallen slightly since the SNB’s last monetary policy review in June. It was last at 1.6 percent, back within the SNB’s target range of 0 to 2 percent.

A look abroad: On Wednesday, the US Federal Reserve extended the pause in interest rates. In response, the European Central Bank (ECB) increased policy interest rates by a further 25 basis points last week.

++Update will continue when the press conference starts at 10:00

Source :Blick