The central bankers of Switzerland, as a European so-called Alpine country, which has been considered one of the richest countries in the world for many decades, at today’s meeting of the Swiss National Bank (SNB) on September 21, 2023, left the current level . The current basic interest rate in Switzerland thus remains at the same level of 1.75% per annum. The original level of the interest rate in the recent past was at the so-called negative (negative) interest rate until June 2022, and the central bankers of the SNB gradually increased it to the current value. The Swiss National Bank thus ended a series of five consecutive interest rate hikes at this Thursday’s quarterly meeting on 21/09/2023 on monetary policy unchanged. The significant tightening of monetary policy in recent quarters is preventing persistent inflationary pressures,” Switzerland’s central bank, the SNB, said in a post-meeting statement. “From today’s point of view, it cannot be ruled out that further tightening of monetary policy may be necessary to ensure price stability in the medium term,” the SNB added.
According to economic reporters in connection with analysts of brokerage companies and financial strategists of the foreign exchange market, this decision primarily affects the exchange value of Switzerland’s domestic currency, which is the Swiss franc (CHF). This Alpine European country’s currency, the Swiss franc (CHF), has enjoyed not only investor popularity for many decades, but also the popularity of a whole range of other financial market participants, including small savers, and is considered a “safe haven” currency. Currently, during the European afternoon of Thursday, September 21, 2023, at approximately 13:18 CET, the Swiss Franc (CHF) against the US Dollar (USD) was traded on the forex market at a value of 0.9053 CHF per USD with the daily strengthening of the USD by + 0.75% against the CHF. The single European currency Euro (EUR) also strengthened against the Swiss Franc as the USD at a mutual exchange rate of 0.9626 CHF to EUR with the EUR up + 0.52% against the CHF for the day to date. These mutual exchange rates were achieved when the global currency pair EUR/USD traded at an exchange rate of 1.064 USD on the day and time indicated, with the EUR down by -206% against the USD on the day to date.
According to the latest published economic data, current inflation in Switzerland reached 1.6% year-on-year in August this year 2023, which is comfortably below the SNB’s 2% target and significantly lower than inflation in countries paying with the Euro (EUR) known as the Eurozone , where total inflation in the eurozone for the last month of August of this year 2023 reached 5.3% year-on-year. In an interview with CNBC’s economic news after the SNB’s decision, SNB Governor Mr. Thomas Jordan insisted that “the war on inflation is not over yet” and that policymakers are watching the situation closely, with further tightening possible at the December meeting later this year in 2023. Switzerland’s SNB noted that the outlook for global economic growth “remains subdued” in the coming quarters, although inflation “is likely to remain elevated globally for the time being”. “In the medium term, however, it should return to milder levels, not least because of a more restrictive monetary policy,” the central bank of Switzerland said. However, the SNB report indicated that a “significant slowdown in the global economy” could not be ruled out given persistently high inflation elsewhere in the world, which could require further tightening of monetary policy by some central banks. Among other things, this SNB comment after today’s meeting also took into account the possible deterioration of the energy situation in Europe during this winter 2023/2024.