The Swiss National Bank (SNB) met market expectations by raising its interest rate by 25 basis points to 1.75% at its latest meeting.
This was the central bank's fifth consecutive increase, putting Swiss interest rates at their highest level since April 2002.
The SNB said its latest move is aimed at overcoming inflationary pressures that have risen again in the medium term.
In addition to that, the central bank is also ready to intervene in the currency market to maintain price stability which puts the inflation target at around 0-2%.
This suggests that more tightening may continue to be implemented by the central bank.
Although moderate by international standards, Swiss inflation remains above the target range since February 2022. In May, inflation rose to 2.2%.
To boost the value of the swiss franc, the SNB has been selling foreign currencies in recent months, where its strength has reduced the impact of more expensive imports.
Following the results of the SNB meeting, the initial reaction of the swiss franc did not show much change with the price hovering around 0.8900 against the US dollar.
