Swiss franc strengthens, Swiss National Bank cuts interest rate sharply by 50 basis points | Real Time Headlines

The Swiss National Bank cut its key interest rate by 50 basis points on Thursday, beating expectations for a smaller cut amid sluggish inflation and a strong Swiss franc.

The cut brings the bank’s key interest rate to 0.5%. More than 85% of economists polled Reuters had previously forecast the bank would implement a 25 basis point rate cut.

Switzerland becomes first major economy to ease monetary policy restrictions MarchFour interest rate cuts were implemented this year to curb the appreciation of the renminbi and the decline in consumer prices.

Swiss inflation An increase of 0.7% Annual increase of 0.6% in November October. The Swiss franc is widely seen as a safe haven amid political turmoil in the euro zone and has largely refused to give up ground despite the Swiss National Bank cutting interest rates. The outlook for Swiss export opportunities, already constrained by tepid foreign demand and weak sales orders, is clouded by rising prices.

OctoberThe business climate index released by industry association Swissmechanic fell to its lowest level since January 2021, and the agency noted that orders, sales and profit margins are expected to fall further in the fourth quarter.

Industry association Swissmem reported in November that the Swiss technology industry continues to be sluggish. emphasize“Key indicators do not suggest that the economy will recover soon. Against this background, efforts at the political level must be stepped up to promote the Swiss export economy’s access to growing markets. Specifically, free trade.”

Official data showed overall economic growth was “below average” at 0.2% in the third quarter, after growing at 0.4% in the first three months. end of Novemberdragged down by the industrial sector.

Market focus will turn to the European Central Bank meeting later, with the ECB widely expected to cut interest rates by 25 basis points.

This breaking news story is being updated.