Switzerland raises interest rates
18:57
The Swiss National Bank (NBS) raised interest rates by 50 bps. Switzerland remains negative: -0.25 percent after the hike. This is not good news for holders of loans denominated in francs.
"The decision came as a surprise to investors who had expected to leave rates unchanged. The SBP justified the hike on the grounds of expanding inflation and did not rule out further increases and intervention in the foreign exchange market," analysts at ING Bank said.
The NBS also raised its forecasts for annual average inflation in 2022-2024: the Swiss bank now expects inflation at 2.8 percent this year and 1.9 percent and 1.6 percent in the following years.
"The NBS decision is a step ahead of the European Central Bank's announcement of interest rate hikes in July and September. The next NBS meeting is not scheduled until September 22, which with the ECB's expected moves would require a strong NBS response in three months," ING economists added.
