Swiss National Bank announced a 50 basis points rate hike
The Swiss National Bank decided to continue its hawkish policy at its meeting. On Thursday, it delivered 50 basis points rate increase. The Swiss officials stated that inflation remains high in the country, and they need higher interest rates to tame it. However, analysts are concerned due to recent turmoil in the global banking sector. Some of them indicated that if the major central banks continue the tightening policy, it might push their economies into recession. That’s especially concerning now, as several U.S. regional banks collapsed last weekend unexpectedly, causing much volatility in the markets.
However, the U.S. Federal Reserve and other banks rallied to help mitigate the possible damage. They acted very quickly to avoid a global crisis. Still, economists didn’t expect any major banks to deliver rate hikes this week. So, the Swiss National Bank’s decision came as a surprise.
Furthermore, the bank stated that it might continue hiking rates in the coming months if necessary. The policymakers also confirmed that the country would actively participate in the foreign exchange market. The inflation remains stubbornly high in Switzerland, even though this is the fourth consecutive rate hike the SNB delivered to hinder rising prices. The government’s inflation target is 0-2%. But the reports show that it currently remains at 3.4%.
The Philippines central bank also increased rates by 25 bps
The Philippine central bank is another one that remained on the hawkish course. It raised its benchmark interest rate by 25 basis points today, the latter hitting 6.25%. However, the officials announced that they would take into account consumer prices before deciding whether continue hiking or not in the coming months.
Economists expected the bank to deliver a quarter-point increase. Overall, the Philippine central bank has increased rates by 425 basis points since May. After today’s news, the peso climbed up by 0.1% to 54.33 versus the U.S. dollar. However, Philippine shares plummeted by 0.15% on Thursday.