The Swiss National Bank (SNB) raised interest rates by 75 basis points from -0.25%. up to 0.50 percent This is the second hike in a row. A tightening of the monetary policy is bad news for the franc borrowers. When the Swiss currency strengthens, their loan installments will increase.
The decision to raise by 75 basis points was in line with analysts’ expectations.
“SNB continues to tighten monetary policy and raises the SNB interest rate by 0.75 percentage points to 0.5 percent. In this way, it counteracts a rebound in inflation and the pressure on it spreading to goods and services,” the SNB wrote in a statement released after the meeting.
The rates have been negative for almost eight years
The previous rate hike took place in June. It surprised economists then. After Thursday’s decision, interest rates in Switzerland turned positive for the first time since December 2014.
SEE: NBP survey: Banks will tighten the criteria for granting loans
Tightening the monetary policy usually results in the strengthening of the local currency, which bodes badly for Poles who are indebted in Swiss francs. When the exchange rate against the zloty increases, their loan installments will also become higher.
VIDEO: The Swiss National Bank raised interest rates. Bad news for franc borrowers-
The Swiss central bank wants to fight inflation, which rose to 3.5 percent in August by raising interest rates. per year. This is a much lower level than in most European countries, but still remains the highest in nearly 30 years, which worries SNB representatives.
The next meeting will be held on December 15.
arż / ml / polsatnews.pl
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