Swiss central bank increases key interest rate by 0.5 percentage points

Zurich The Swiss National Bank (SNB) is raising interest rates again due to renewed inflationary pressure and despite the recent turbulence in the banking sector. The SNB key interest rate will be raised by 0.5 percentage points to 1.5 percent, as the central bank announced on Thursday. Experts polled by Reuters had expected an increase of this magnitude.

According to the central bank, it cannot be ruled out that additional interest rate hikes will be necessary to ensure price stability in the medium term. If necessary, the SNB also intends to continue to intervene in the foreign exchange market.

The measures taken by the central bank gave the Swiss franc a boost. The dollar lost 0.6 percent against the national currency to CHF 0.9118.

On the bond markets, investors threw two-year Swiss paper out of their depots. Bond prices generally move in the opposite direction to an economy’s interest rate level. The yield on short-dated bonds rose accordingly to a weekly high of 1.173 percent.

More: Follow the development of the banking crisis in the news blog

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