By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
AmextaFinanceAmextaFinance
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
9
Notification Show More
News
Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)
2 hours ago
Videos
“Invest in what you know.”
22 hours ago
News
‘All the banks were lying’: Tom Hayes on his decade-long battle for justice
22 hours ago
Videos
Tesla Opened A Diner In LA — Here’s What It’s Like
23 hours ago
News
Wall Street Roundup: Tesla Skepticism, Google Stands Out, DORK Shorts
1 day ago
Videos
2️⃣ of Buffett’s biggest investing tips this financial adviser follows.
2 days ago
Videos
Why It Feels Like Every Company Suddenly Wants To Sell You Protein
2 days ago
News
Deutsche Bank Aktiengesellschaft (DB) Q2 2025 Earnings Call Transcript
2 days ago
News
Asian automakers’ profits tumble after ‘unprecedented’ effects of US tariffs
2 days ago
Aa
AmextaFinanceAmextaFinance
Aa
  • Banking
  • Credit Cards
  • Loans
  • Dept Management
  • Mortgage
  • Markets
  • Investing
  • Small Business
  • Videos
  • Home
  • News
  • Banking
  • Credit Cards
  • Loans
  • Mortgage
  • Investing
  • Markets
    • Stocks
    • Commodities
    • Crypto
    • Forex
  • Videos
  • More
    • Finance
    • Dept Management
    • Small Business
Follow US
AmextaFinance > News > Swiss central bank cuts interest rates to zero
News

Swiss central bank cuts interest rates to zero

News Room
Last updated: 2025/06/19 at 10:06 AM
By News Room
Share
6 Min Read
SHARE

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The Swiss National Bank has cut interest rates by a quarter point to zero but did not go so far as negative rates, as it battles to restrain its currency, which has surged on global trade tensions. 

It is the first time that the Alpine country, which is one of the few globally to experiment with negative rates, has an interest rate of zero as it tackles lagging inflation and a surging Swiss franc, a haven currency that investors have bought up amid US President Donald Trump’s trade war.

The cut comes after annual inflation in Switzerland dipped to minus 0.1 per cent in May, the first negative reading in four years. The appreciating Swiss franc — up 10 per cent against the dollar this year — has slashed the cost of imports, dragging down consumer prices.

The Swiss franc strengthened after Thursday’s expected cut, with the dollar down 0.2 per cent against the franc by afternoon trading at SFr0.817.

A minority of traders had been betting on a larger, half-point cut, according to levels implied by the swaps markets. The franc’s rally after Thursday’s decision was prompted by those bets being “unwound”, said analysts at BBH.

SNB chair Martin Schlegel said at a press conference that the bank would “not take a decision to go negative lightly”. The central bank would also have to take into account the interests of savers, pension funds and others, he said.

Traders slightly trimmed their bets on further rate cuts after Schlegel’s remarks, and were putting a roughly 60 per cent chance that the SNB will cut again to minus 0.25 per cent by March next year.

Switzerland’s two-year government bond yields, which are sensitive to movements in rate expectations, rose 0.09 percentage points to minus 0.10 per cent.

The SNB has also repeatedly flagged financial stability risks from soaring valuations for Swiss property in a lower interest rate environment.

Schlegel did not, however, rule out a move into negative territory, with global trade turmoil possibly forcing the bank down that path in the months ahead.

“It sounds like they are going to play it by ear, which slightly dents market conviction on negative rates,” said Francesco Pesole, an FX strategist at ING.

The so-called Swissie’s sharp rise this year has complicated policymaking. The SNB is attempting to ease pressure without triggering accusations of currency manipulation from the US, which placed Switzerland on a watchlist during Trump’s first term. Analysts say rate cuts are a diplomatically safer route than direct FX intervention. 

The SNB’s decision contrasts with the Federal Reserve’s continued wait-and-see approach. The Bank of England also held rates at 4.25 per cent at its latest meeting.

However, Norway’s central bank unexpectedly cut borrowing costs on Thursday, loosening monetary policy for the first time since the start of the Covid-19 pandemic. The strength of the economy in western Europe’s largest oil and gas producer had led it to keep rates higher than nearly all its neighbours, including Sweden’s Riksbank and the European Central Bank. But Norges Bank decided that the inflation outlook was subdued enough that it could cut rates by a quarter point to 4.25 per cent. 

Switzerland first introduced negative interest rates in December 2014, when the SNB set the deposit rate at minus 0.25 per cent to stem the franc’s appreciation amid safe-haven inflows.

The SNB at one stage pushed the rate down to minus 0.75 per cent, the lowest level in the world. The policy remained in place for more than seven years, also making it one of the world’s longest negative rate periods until it exited it in 2022. 

Thursday’s cut creates a potentially tricky situation for Swiss banks. They no longer earn interest on their reserves with the SNB but theoretically have less justification to pass that cost on to customers.

Daniel Kalt, chief economist at UBS, the country’s largest bank, said zero per cent was probably the most difficult scenario for banks.

“In terms of pressure on net interest margins, it couldn’t be worse than with the situation we have today. With this, it is hard for banks to justify charging customers fees like they did during the previous period of negative interest rates,” Kalt said.

Video: Why governments are ‘addicted’ to debt | FT Film

Read the full article here

News Room June 19, 2025 June 19, 2025
Share this Article
Facebook Twitter Copy Link Print
Leave a comment Leave a comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finance Weekly Newsletter

Join now for the latest news, tips, and analysis about personal finance, credit cards, dept management, and many more from our experts.
Join Now
Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

This article was written byFollowThe Investment Doctor is a financial writer, highlighting…

“Invest in what you know.”

Watch full video on YouTube

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

The last time Tom Hayes had his picture taken at London’s Southwark…

Tesla Opened A Diner In LA — Here’s What It’s Like

Watch full video on YouTube

Wall Street Roundup: Tesla Skepticism, Google Stands Out, DORK Shorts

Listen below or on the go on Apple Podcasts and Spotify Tesla's…

- Advertisement -
Ad imageAd image

You Might Also Like

News

Bank of America: Higher Yielding Preferred Stock Is Still Attractive (NYSE:BAC)

By News Room
News

‘All the banks were lying’: Tom Hayes on his decade-long battle for justice

By News Room
News

Wall Street Roundup: Tesla Skepticism, Google Stands Out, DORK Shorts

By News Room
News

Deutsche Bank Aktiengesellschaft (DB) Q2 2025 Earnings Call Transcript

By News Room
News

Asian automakers’ profits tumble after ‘unprecedented’ effects of US tariffs

By News Room
News

The polarising power of Andriy Yermak, Ukraine’s other wartime leader

By News Room
News

Turning Point Brands: Is This ‘Smokeless’ Stock Too Hot To Touch? (NYSE:TPB)

By News Room
News

Macrons file US lawsuit over claims France’s first lady was born male

By News Room
Facebook Twitter Pinterest Youtube Instagram
Company
  • Privacy Policy
  • Terms & Conditions
  • Press Release
  • Contact
  • Advertisement
More Info
  • Newsletter
  • Market Data
  • Credit Cards
  • Videos

Sign Up For Free

Subscribe to our newsletter and don't miss out on our programs, webinars and trainings.

I have read and agree to the terms & conditions
Join Community

2023 © Indepta.com. All Rights Reserved.

YOUR EMAIL HAS BEEN CONFIRMED.
THANK YOU!

Welcome Back!

Sign in to your account

Lost your password?