Switzerland's central bank, the Swiss National Bank, decided on the 23rd to raise interest rates by 2.0% for the second consecutive time to contain inflation. While anxiety still simmered in financial markets following the financial problems of Credit Suisse, a major financial group, the company indicated that it would prioritize controlling inflation.
The Swiss National Bank issued a statement on the 23rd, stating that the inflationary trend persists and that it will raise the policy interest rate by 0.5% from 1% to 1.5%.
This is the fourth consecutive rate hike and the second consecutive 4.0% rate hike, following the previous one in December.
In Switzerland, the CPI continued to rise at 5.12 percent last month, well above the price stability target of 2 percent, and the statement stated that "further interest rate hikes are possible in order to achieve price stability over the medium term."
The statement also referred to the Credit Suisse bailout, saying that "measures taken by the government and monetary authorities have put a stop to the crisis."
In financial markets, even after UBS, the largest Swiss financial company, agreed to acquire Credit Suisse, the financial giant, the central bank continued to move unsteadily, but it seems that the central bank decided to raise interest rates from the standpoint that it was fully backed by a bailout purchase and a coordinated market stabilization measure coordinated with other countries.
As central banks around the world are forced to strike a difficult balance between controlling inflation and stabilizing the financial system, they have continued to raise interest rates as scheduled with the European Central Bank on the 16th of this month and the Federal Reserve in the United States on the 22nd.