Central banks of Switzerland, Norway raise interest rates to highest since 2008-2009

The Swiss National Bank (SNB) on December 15 raised its interest rate by 50 basis points to 1% per annum, Report informs referring to Interfax.

Thus, the rate in Switzerland is now at its highest level since 2008.

The Central Bank of the country made the move following the results of the third meeting in a row to combat high inflation, but slowed down the pace of monetary tightening compared to 75 bp. in September. For the first time this year, the SNB raised the cost of borrowing in June by 50 bp. Prior to that, the rate had been at minus 0.75% since 2015.

The regulator’s announcement also notes that it may need to continue raising rates going forward to ensure price stability over the medium term.

Consumer prices in Switzerland in November rose by 2.9% in annual terms, as in October. Inflation slowed down from 3.2% in September and a 30-year high of 3.5% in August.

The SNB forecast for inflation in Switzerland for the current year was lowered to 2.9% from 3% earlier, for 2023 it was kept at 2.4%, for 2024 it was raised to 1.8% from 1.7%.

The Norwegian central bank (Norges Bank) on December 15 raised its key rate by 25 bp to 2.75% per annum, which is the highest since February 2009.

The regulator also noted that it is likely to raise the rate again, as inflation is above the target.

According to the forecasts of the leaders of the Norwegian Central Bank, next year the rate will be kept at the level of 3%.