Key interest rate increase – National Bank ends the age of negative interest rates – News

Key interest rate increase – National Bank ends the age of negative interest rates – News
Key interest rate increase – National Bank ends the age of negative interest rates – News
  • The Swiss National Bank (SNB) raises the SNB key interest rate by 0.75 percentage points.
  • The key interest rate is thus back in positive territory at 0.5 percent.
  • It is already the second rate hike this year: in mid-June, the SNB raised the key interest rate from -0.75 percent to -0.25 percent.

With this step, the monetary authorities want to counteract the renewed increase in inflationary pressure, as the SNB announced on Thursday. In addition, it should be made more difficult for inflation to spread to goods and services that have been less affected so far. It cannot be ruled out that further interest rate hikes will be necessary in order to ensure price stability in the medium term, the currency watchdogs also emphasized.

Since the rate hike in mid-June, inflation has continued to rise in Switzerland. For August 2022, the statisticians reported inflation of 3.5 percent, after 3.4 percent in June and July.

As of today, the SNB’s negative interest rates are history after almost eight years. The central bank introduced this on December 18, 2014, initially with an interest rate of -0.25 percent. In January 2015, the key interest rate was lowered to a record low of -0.75 percent when the minimum exchange rate for the euro was abandoned.

US Federal Reserve far ahead

The US Federal Reserve, which has already raised its key interest rate five times since the beginning of the corona pandemic, is considered the pioneer of the monetary policy change, the last time on the previous evening. The US interest rate is now in a range of 3.00 to 3.25 percent.

The European Central Bank (ECB), in turn, decided two weeks ago to fight record inflation with the largest interest rate hike in its history. The key interest rate in the euro zone rose by 0.75 percentage points to 1.25 percent.

The Swiss National Bank also emphasized on Thursday its intention to remain active in the foreign exchange market if necessary. In 2021, the SNB bought foreign currencies for CHF 21.1 billion.

Consumer protection calls for higher interest rates on savings accounts

open box
close the box

In view of the SNB’s decision, consumer protection has called on the banks to increase interest on savings accounts and reduce fees. Otherwise, savers are threatened with “massive asset losses,” wrote consumer protection in a statement. Switching to a bank with higher interest rates is worth it in the long term.

According to the head of consumer protection, Sara Stadler, the banks have enough leeway: “Three years ago, for example, the interest rate for ten-year fixed-rate mortgages was around 1 percent, today we are around 3 percent.”

The article is in German

Tags: Key interest rate increase National Bank ends age negative interest rates News

PREV On the trail of the past: Successful “Open Monument Day” in Bendorf
NEXT War in Ukraine – What does the Russian partial mobilization mean?