ZURICH: The Swiss National Bank cut interest rates by 25 basis points on Thursday, its third such reduction this year, as it echoed steps to lower borrowing costs taken by the European Central Bank and US Federal Reserve.

The SNB cut its policy rate to 1.00%, the lowest level since early 2023, as expected by 30 of 32 analysts in a Reuters poll. Markets had priced in a 55% probability of a 25 basis point cut before the decision.

The decision, the last in the 12-year tenure of SNB Chairman Thomas Jordan, was enabled by the taming of inflation in Switzerland - which slowed to 1.1% in August and has been within the central bank’s 0-2% target range for the last 15 months.

Swiss franc rallies broadly after 25-bp SNB rate cut

The Swiss franc has also appreciated in recent weeks, rising to its highest level in nine years against the euro in early August, adding to the difficulties facing Switzerland’s exporters.

“The SNB’s easing of monetary policy today takes the reduction in inflationary pressure into account. Further cuts in the SNB policy rate may become necessary in the coming quarters to ensure price stability over the medium term,” the SNB said.