Home Business Swiss National Bank raises rates by 75bps, out of the era of negative rates

Swiss National Bank raises rates by 75bps, out of the era of negative rates

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The Swiss National Bank raised its benchmark interest rates to 0.5%. A move that puts an end to the era of negative rates in Europe.

The 75 basis point hike follows an increase to -0.25% on June 16, which was the first rate hike in 15 years. Previously, the Swiss central bank had kept rates stable at -0.75% since 2015.

Inflation in Switzerland is currently at its highest in three decades, reaching 3.5% last month.

The Swiss franc reached its strongest level against the euro since January 2015 at the beginning of the week as economists began speculating on the prospect of a 75 basis point rise.

Switzerland was the last country in Europe with a negative policy rate as central banks in the region aggressively hiked rates to cope with inflationary pressures.

Japan is now the last major economy with a central bank with rates in negative territory, on Thursday the Bank of Japan decided to keep interest rates unchanged at -0.1%.

Denmark, meanwhile, ended its nearly ten-year negative streak on September 8, when the central bank raised policy rates by 0.75 percentage points to 0.65%.

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