In a twist that stunned economic experts, the Swiss National Bank (SNB) recently announced that it was suspending its monetary policy restriction cycle, opting to keep its key interest rate stable at 1.75%.
This unexpected move was greeted with surprise by those who had expected interest rates to rise further.
The SNB authorities appear to have taken this decision on the basis of confidence in the development of inflation, which is currently below the 2% ceiling set by the SNB itself, standing at 1.6%.
This scenario has led the Bank to rule out any imminent risk of an excessive acceleration in inflation for the time being.
Looking deeper into the SNB's inflation forecasts for the next few years, a rate of 2.2% is projected for 2023 and 2024, while a rate of 1.9% is estimated for 2025. These projections suggest the Swiss National Bank's confidence in the stability of the Swiss economy in the medium term, thus influencing the decision to keep the key rate unchanged.
The SNB's decision triggered a lively debate among economists and market participants, with conflicting views on the implications of this measure.
Some consider it a prudent move to avoid an excessive economic slowdown, while others express concerns about the possible risk of unstoppable future inflation. In any case, it appears that the Swiss National Bank carefully weighed the current economic conditions and inflation trends before making this decision.
How the Swiss economy evolves in the coming months and how the Swiss National Bank will adapt its monetary policy in response to changing market conditions remains to unfold.
We will continue to follow developments and provide updates and analysis on the Swiss financial world.
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