SNB raises policy rate by 75 bps to 0.50%, as expected

• Prior -0.25%
• Tighter policy is to counter renewed rise in inflationary pressure
• It cannot be ruled out that further increases will be necessary to ensure price stability
• Also willing to be active in the foreign exchange market as necessary
• Sees inflation at 3% for 2022 (previously 2.8%)
• Sees inflation at 2.4% in 2023 (previously 1.9%)
• Sees inflation at 1.7% in 2024 (previously 1.6%)
• Expects only weak economic growth in baseline scenario
• Full statement

Buy the rumour, sell the fact? That may be the case as the market reaction is certainly an interesting one with the Swiss franc significantly weakening in the aftermath, despite the SNB putting an end to the negative interest rates era. Some commentators are pointing to the wording in the statement that the central bank says it will be "willing to be active in the FX market as necessary" but that was also phrased similarly in their last policy statement in June.

EUR/CHF EUR/CHF EUR/CHF is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the Swiss franc of Switzerland (code CHF). The pair’s rate indicates how many Swiss francs are needed in order to purchase one euro. For example, when the EUR/CHF is trading at 1.1000, it means 1 euro is equivalent to 1.1 Swiss francs. The euro (EUR) is the world’s second most traded currency, while the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a com EUR/CHF is the currency pair encompassing the European Union’s single currency, the euro (symbol €, code EUR), and the Swiss franc of Switzerland (code CHF). The pair’s rate indicates how many Swiss francs are needed in order to purchase one euro. For example, when the EUR/CHF is trading at 1.1000, it means 1 euro is equivalent to 1.1 Swiss francs. The euro (EUR) is the world’s second most traded currency, while the Swiss franc (CHF) is the world’s sixth most traded currency, resulting in a com Read this Term has seen a big jump from 0.9470 to 0.9600 currently.