Swiss Interest Rate Still Likely to Come Down

Swiss Interest Rate Still Likely to Come Down

In the past four years, the Swiss national bank has maintained a monetary policy of negative interest rate.

With a deposit rate standing at a negative of 0.75% and the interest rate on cash at Zero percent, a top official of the apex bank has made it known in a recent newspaper interview that there is a possibility that the interest rate can still go down more.

While explaining the notion behind the central bank monetary policy, he explained that although safekeeping of funds entails a high level of cost, yet the sole target of interest rate cut set by the apex bank has not been met so it is likely to still go down.

Stemming from the belief that a minus interest rate will reduce their profits, the Swiss bank monetary policy didn’t go down well with commercial banks which form its largest critics. In the case that if the interest rate goes negative on cash, the banks will lose their customers even though the safekeeping of funds is cost-intensive.

He, however, reiterated the Swiss bank goal of discouraging savings through its monetary policy rather encourage investments that are supportive of the economy.

In the last four years, the Swiss national bank has worked assiduously to regulate the Swiss Franc while pledging a role in the currency market when required.

The top official expressed optimism that the rate may become positive in the nearest future, the timing which is difficult to ascertain.

News from the Eurozone
ECB head, Christiane Lagarde in a recent speech has urged the countries in the Eurozone to work assiduously in using the fiscal means to improve the slowing economies recorded in the region in recent times.

Recent GDP figures released showed an average increase of 1.1% across the EuroZone while macro economies like Germany narrowly averted a recession in the October inflation stats released while France and Italy held steady their GDP figures.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.