The Swiss National Bank (SNB) announced on Thursday its decision to slash its benchmark sight deposit rate by 25 basis points (bps) to 1.00%, denying some analysts' guesses of a 50-bps reduction.
The institution explained its move was based on Switzerland's annual inflation rate hitting lower-than-expected figures between this and the previous monetary policy meeting, namely 1.1% in August, which could lead to new cuts in coming quarters. Still, it noted higher prices for domestic services, which have kept inflation from going down further.
"The forecast for Switzerland, as for the global economy, is subject to significant uncertainty. Developments abroad represent the main risk," the SNB said. Still, it noted that the annual inflation rate is expected to stand at 1.2% for 2024, 0.6% for 2025, and 0.7% for 2026, and the economic growth at 1.0% for 2024 and 1.5% for 2025.
