SNB surprises with 50 bps rate hike, bringing policy rate to -0.25%

• Prior -0.75%
• Sight deposits interest rate raised by 50 bps to -0.25%

• The rate hike is to counter increased inflationary pressure
• Tighter monetary policy aimed at preventing inflation from spreading more broadly
• SNB still willing to be active in foreign exchange market as necessary
• Cannot rule out further rate hikes to stabilise inflation
• Full statement

Well, it looks like I'll have to eat my words. The SNB does have the propensity to pull off a surprise and almost no one saw this coming, at least not a 50 bps move. It is their first rate hike since 2007 as they try to get ahead of the curve on inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term. USD/CHF has dropped from 0.9975 to 0.9830 and this could just be the start if markets pile on the pressure. It's not a good look as for risk as well when even the most dovish of central banks are starting to move.