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Investing.com -- The Swiss National Bank (SNB) cut its policy rate by 0.25 percentage points today, bringing it down to 0.25%, as expected by market participants. The revised policy rate will be effective from 21 March 2025.
The SNB also stated its willingness to intervene in the foreign exchange market as required. The decision to adjust the rate is aimed at maintaining appropriate monetary conditions given the existing low inflationary pressure and the increased downside risks to inflation, the bank said.
Inflation has been consistent with predictions since the last monetary policy assessment. It fell from 0.7% in November to 0.3% in February, primarily due to a drop in electricity prices in January. Domestic services continue to be the main driver of inflation.
The conditional inflation forecast has not changed significantly since December. Without the rate cut announced today, the forecast would have been lower in the medium term.
The forecast remains within the range of price stability for the entire forecast horizon. It predicts average annual inflation at 0.4% for 2025, 0.8% for 2026, and 0.8% for 2027.
These forecasts are based on the assumption that the SNB policy rate will remain at 0.25% throughout the forecast period.