MNI BRIEF: SNB Hikes Policy Rate, Says More May Be Needed

The Swiss National Bank hiked its key policy rate by 25 bps to 1.75% Thursday and warned further hikes could be needed to counter rising medium-term inflationary pressures. (MNI WATCH: SNB Likely To Hike 25bp, But 50bps Not Ruled Out)

To ensure appropriate monetary conditions, the SNB said it "remains willing to be active in the foreign exchange market as necessary", and that in the current environment it would focus on selling foreign currency.

In its statement, the SNB said inflation has declined significantly in recent months, and stood at 2.2% in May, a fall largely attributable to lower inflation on imported goods, in particular lower prices for oil products and natural gas. Going forward, inflation was forecast at 2.2% in 2023, 2.2% in 2024 and 2.1% in 2025.