UPI By Paul Godfrey
March 23 (UPI) — Switzerland’s central bank raised its key interest rate by 0.5 percentage points Thursday amid renewed inflationary pressures and in the wake of the rescue of the country’s second-largest bank at the weekend.
The increase to 1.5% effective Friday leaves a significant policy gap with other advanced economies which for more than a year have been hiking rates to around triple those of the Swiss National Bank, although inflation in Switzerland is relatively low.
In taking the step to counter a renewed increase in inflationary pressure, the bank said it could not rule out further increases to its policy rate would be necessary to ensure price stability over the medium term.
Swiss inflation has been rising since the beginning of the year reaching 3.4% in February, driven by higher electricity, tourism services and food prices.
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