Swiss Central Bank Cuts Interest Rate To Zero To Battle Inflation

Switzerland’s central bank (SNB) has announced that it is cutting its key interest rate to zero, citing easing inflationary pressures, Doloresz Katanich reported for Euronews.

The SNB attributed the inflation drop to falling prices in the tourism and oil sectors. I Photo: Marcokaimann Flickr

The SNB will lower its policy rate from 0.25% to 0%, following data showing that inflation slipped into negative territory in May, with consumer prices falling 0.1% year-on-year.

The move reflects a broader trend in Western economies, where inflation has moderated, though political instability and U.S. tariffs continue to cloud the global outlook.

The SNB attributed the inflation drop to falling prices in the tourism and oil sectors.

It now forecasts annual inflation at 0.2% in 2025, rising to 0.5% in 2026 and 0.7% in 2027, assuming the interest rate remains at zero.

“In its baseline scenario, the SNB anticipates that growth in the global economy will weaken over the coming quarters,” the central bank said. “Inflation in the U.S. is likely to rise, while in Europe, further decreases in inflationary pressure are expected,” Associated Press also reported.