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SNB cuts Deposit Rate to 1.25%, as expected

Board members of the Swiss National Bank (SNB) decided to cut the benchmark Demand Deposit Rate by 25 basis points (bps) from 1.50% to 1.25%, following their quarterly assessment of monetary policy on Thursday.

The decision was in line with market expectations.

The SNB announced a surprise 25 bps rate cut in March to 1.50%, making it the first major central bank to reverse tighter monetary policy.

Summary of the SNB monetary policy statement

Momentum in the mortgage and real estate markets in recent quarters has been weaker than in previous years.

You are also willing to be active in the foreign exchange market as needed.

The utilization of total production capacity was normal.

A further rise in geopolitical tensions could result in weaker development of global economic activity.

Able to maintain appropriate monetary conditions.

It will adjust its monetary policy if necessary to ensure that inflation remains within the range consistent with price stability over the medium term.

Monetary policy remains restrictive in many countries.

Inflation in Switzerland is currently being driven mainly by higher prices for household services.

Global economic growth was strong in the first quarter of 2024.

The outlook for Switzerland, like the global economy, is subject to significant uncertainty. Overseas developments represent the main risk.

The SNB sees 2025 inflation at 1.1% (the previous forecast was 1.2%).

The SNB sees 2024 Swiss growth at around 1% (the previous forecast was around 1.0%).

The SNB sees inflation for the first quarter of 2027 at 1.0%.

The SNB sees 2024 inflation at 1.3% (the previous forecast was 1.4%).

The SNB sees 2026 inflation at 1.0% (the previous forecast was 1.1%).

Source: Fx Street

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