Swiss National Bank delivers another 25 bps rate cut

The Swiss National Bank cut its benchmark policy rate by 25 basis points to 1.25% at its June meeting, as it cited easing underlying inflationary pressure.

The move, which came in line with market consensus, followed another 25 bps cut in March.

At present, Swiss inflation is mostly driven by higher cost of domestic services, the SNB said.

Annual inflation in Switzerland stood at 1.4% in May.

The central bank now forecasts average annual inflation of 1.3% this year, 1.1% in 2025 and 1% in 2026, similar to the March projections.

In addition, the SNB forecasts GDP growth of about 1% this year and 1.5% in 2025.

The Swiss Franc sharply lost ground on the day against the US Dollar, with the USD/CHF currency pair last trading at 0.8903.

Prior to the SNB policy decision, the major Forex pair was trading not far from a three-month low of 0.8826, as political turmoil in France has bolstered safe haven demand for the Franc.