Swiss housing on the lake with mountains in switzerland

Switzerland Monetary Policy December 2022

Switzerland: SNB raises rates by 50 basis points in December

At its meeting on 15 December, the Swiss National Bank (SNB) raised its policy rate from 0.50% to 1.00%, matching the increase in the European Central Bank’s policy rates that was announced on the same day.

As the SNB stated in its press release, the hike was aimed at “countering increased inflationary pressure and a further spread of inflation”. While inflation is mild by European standards and has pulled back since August’s peak, it remains above the SNB’s 2% target. Moreover, the unemployment rate is hovering close to multi-decade lows.

Looking ahead, the SNB reiterated guidance that it “cannot be ruled out that additional rises in the SNB policy rate will be necessary to ensure price stability”. The Consensus is for the policy rate to peak at close to 1.5% in Q3 next year.

On the outlook, analysts at ING said:

“The SNB now expects inflation to average 2.9% in 2022, 2.4% in 2023 and 1.8% in 2024. These above-target inflation forecasts for the end of the forecast horizon signal that the SNB is not done with monetary tightening. We believe that a further 50bp rate hike could take place at the next meeting in March 2023, taking the rate to 1.5%. Rates will then remain stable for an extended period.”

In contrast, the EIU are more dovish:

“With inflation starting to moderate, the SNB is likely to be approaching the end of its tightening cycle; we expect a final 25-basis-point rate increase at the central bank’s next monetary policy meeting in March 2023.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest