Source: Sharecast
The decision from the Swiss National Bank (SNB) aligned with economists' expectations, and brought borrowing costs to their lowest since September 2022.
It said the move aimed to maintain appropriate monetary conditions amid persistently low inflationary pressures.
In February, Swiss inflation eased to 0.3%, its lowest level in nearly four years, remaining within the central bank's target range of 0% to 2%.
The SNB anticipated moderate global growth in the coming quarters, but acknowledged heightened uncertainties, particularly concerning trade and geopolitical developments.
Following the rate cut, the Swiss franc weakened slightly against both the euro and the dollar.
The currency traded at CHF 0.95705 against the euro, down from 0.9537 earlier, and at CHF 0.8803 to the dollar, a 0.4% decrease on the day.
It also coincided with significant actions by other central banks.
The US Federal Reserve held interest rates steady overnight, citing elevated uncertainty linked to president Donald Trump's trade policies.
Meanwhile, the Bank of England and Sweden's Riksbank were scheduled to announce their policy decisions later in the global day.
“The rate cut had largely been telegraphed, and the non-existent inflation seen in Switzerland highlights exactly why they can continue to ease,” said Joshua Mahony at Scope Markets.
“Nonetheless, this cut is particularly notable as many believe it could be the final move after a raft of cuts that took rates from 1.75% to 0.25% in just five-meetings.
“Instead, the committee needs to gauge whether a move towards negative rates will be justified or not.”
Mahony said the absence of the dollar as a haven despite recent market declines had helped push the Swiss franc higher, meaning further disinflation as imports become cheaper.
“Could this spark another bout of easing from the SNB?
“If not, further CHF strength may be forthcoming.”
Reporting by Josh White for Sharecast.com.
