The Swiss central bank today kept its key interest rate unchanged, despite the recent cuts in the euro region and in the U.S. It has also decided to meet a key demand of the banking industry.
The Swiss National Bank (SNB) kept its key interest rate at minus 0.75 percent on Thursday. The rate remains lower than the key rates of the European Central Bank (ECB) and the U.S. Federal Reserve. Economists had expected the Swiss central bank to keep the rate unchanged because the franc had not appreciated substantially following the rate cut announced by the ECB last week.
Global Slowdown Expected
The rate was left untouched despite a slowdown of economic growth in Switzerland. The central bank expects the rate of growth to reach a level of between 0.5 percent and 1 percent in 2019. In June, it had forecast a growth rate of 1.5 percent. The global growth dynamic is also slowing in the short term, before measures taken by the central banks will bite and help trigger a recovery, the SNB said.
«Over the short term, international momentum is likely to be modest,» the bank said. «However, in the medium term the SNB expects the global economy to pick up again, not least due to monetary policy easing measures.»
Negative Rate Regime Adjustment
The bank also announced that it will receive less money from commercial banks for their cash deposits thanks to a modification of the way it calculates the negative interest. The adjustments means that banks will benefit from a higher exemption threshold.
