The Swiss Central Bank reduced its key rate of a room of percentage on Thursday to recover it at 0%, at the moment refraining from a negative field reassumo, despite the perspectives that “darkened” for the global economy.
The Swiss National Bank (BNS) reduced its inflation prognosis by 2025 to 0.2% (compared to 0.4% before) and 0.5% by 2026 (against 0.8% previously), but left its forecast of early growth, always presenting an increase in the Gross Domestic Product (GDP) between 1% and 1.5%, he said in a press release. “The perspectives have obscured during the next quarter due to the increase in commercial tensions,” said the monetary institution.
In its basic scenario, the Emissions Institute says it expects “a slowdown in the world economy in the next rooms”, believing that inflation “should increase in the United States.” In Europe, she has on the other hand on “a new fall in inflationary pressure.” But this scenario “remains surrounded by great uncertainty,” he said then that “commercial barriers, for example, could further increase and stop the world economy.”
Tariff rights
In Switzerland, the inflationary pressure has decreased, added the monetary institution to explain its decision, saying that it is ready to remain active if necessary in the exchange market and to adapt its monetary policy if necessary. Upstream of their quarterly policy decision, many economists had wondered if the SNB was going to recover its 0% rate or change at a negative interest rate, as was the case for seven years between 2015 and 2022.
Because the wave of inflation in Switzerland has been dominated faster than in its neighbors in Europe, the consumer price index has even fallen in negative terrain in May, to -0.1%. But the overwhelming majority of economists believed that SNB would probably wait a little before returning to a negative interest rate, while waiting for more learning about reciprocal customs tasks in early July.
Between 2015 and 2022, the monetary policy of the BNS was based on a negative interest rate of -0.75%, which had the effect of adding deposits of banks and financial institutions on the amounts that are forced to entrust the Central Bank. The objective was to fight against the overvaluation of the Swiss Franco, one of the main shelter values, such as Japanese and German loans. The increase in deposit costs was aimed at discouraging foreign investors to throw Swiss Franc.
Great Savings
But these seven years of negative rate have left a bitter memory for great savers. Because to protect their margins, the banks had transmitted this rate in the large deposits of their clients, which in practice returned to puncture costs instead of remunerating their savings. This negative rate had also affected pension funds, particularly in the yields of bond investments, which forced them to resort to more risky investments.
The negative rate had also fed the fears of overheating of the real estate market, already very tense, pushing the Swiss authorities to take a countermelted to cool the demand for mortgage loans
Source: BFM TV
