Swiss National Bank Set to Cut Interest Rates Again, Economists Say
The Swiss National Bank is expected to cut its benchmark interest rate by 25 basis points for the third consecutive meeting, according to a recent Multibagger poll. The central bank has been more conservative in its rate hikes compared to other major central banks, starting to cut rates in March earlier than others.
Swiss inflation has fallen to 1.1%, the lowest among G10 economies, while the franc has remained strong against the euro. Most economists predict a 25 basis point rate cut on Thursday, bringing the main interest rate to 1.00%.
Despite calls for a larger rate cut, analysts believe the SNB will stick to a 25 basis point reduction due to limited policy space. The central bank is expected to hold rates in December, with further cuts forecasted for March 2022.
If the poll predictions hold true, the SNB will have cut rates by a total of 75 basis points this year, in line with expectations from the European Central Bank. The strength of the franc has been a concern for policymakers, leading to speculation of large FX interventions in the future.
Overall, the SNB's decision on interest rates can impact the Swiss economy, currency exchange rates, and future monetary policy. Investors and individuals should be aware of these developments to make informed decisions about their finances.