Following in the footsteps of the Federal Reserve (Fed), the Swiss National Bank (SNB) decided to raise interest rates by 75 basis points at its latest policy meeting just now.
This in turn brought the SNB's current interest rate back into positive territory for the first time since 2011 to 0.50%.
It was the second rate hike after the decision made last June, where the central bank surprised the market with a 50 basis point increase in the first rate hike since 2007.
The decision aims to address high inflation following a surge in energy and food prices that has driven headline inflation to a 29-year high of 3.5%.
In addition, the central bank also confirmed that it is ready to intervene in the foreign exchange market if needed.
In the meantime, the central bank revised its inflation forecast with the expectation that it will increase to 3.4% by the end of the year compared to its sene;um forecast of 2% this year from the previous expectation of 2.5%.
Despite this, the Swiss franc traded lower against the stronger US dollar.
