The Swiss National Bank held its policy interest rate steady at 1.75% today, kicking off a busy day for central banks around Europe, which are also expected to pause following their monetary policy tightening campaigns after inflation ebbed.
The Swiss central bank, which over the last 18 months had raised rates from negative 0.75% before pausing in September, also kept its interest rate on sight deposits at 1.75%.
The decision to hold interest rates had been expected by all 31 economists surveyed in a Reuters poll.
"Inflationary pressure has decreased slightly over the past quarter. However, uncertainty remains high," the SNB said in a statement.
"The SNB will therefore continue to monitor the development of inflation closely, and will adjust its monetary policy if necessary," it said.
The European Central Bank and Bank of England also kept rates on hold after their respective meetings today after inflation in the euro zone and Britain cooled recently.
The US Federal Reserve last night left interest rates unchanged its chief Jerome Powell said it was likely done with monetary tightening given inflation was falling faster than expected.
But Norway's central bank today raised its benchmark interest rate by 25 basis points to 4.5% in a surprise decision as it sought to combat persistent inflation, and said it would likely stay put at that level for some time ahead.
In Switzerland, the SNB was aided in its decision to keep rates on hold after Swiss inflation declined to 1.4% in November, marking the sixth month it remained within the range between 0% and 2% targeted by the central bank under its price stability goal.
In the past months, SNB Chairman Thomas Jordan has stressed that the SNB's inflationary goal had not been securely achieved.
He said the bank would not hesitate to tighten monetary policy further if necessary, though markets expect its next move to be a cut.
The central bank, again today, signalled uncertainty around the inflation outlook.
"This is not quite a pivot point where the SNB swings to cutting interest rates, that is still to come," said GianLuigi Mandruzzato, economist at Swiss bank EFG International.
"But it shows the SNB is comfortable that the current round of hikes has come to an end, and we have reached the top of the current cycle."
In its latest economic forecasts, the SNB said it expected Swiss inflation to be 2.1% in 2023, compared with its 2.2% forecast from September, before easing to 1.9% next year, down from an earlier forecast for a 2.2% reading.
