Swiss National Bank Keeps Interest Rate Steady Amid Record Inflation

The Swiss National Bank (SNB) is closely monitoring the impact of record temperatures on food prices, which have contributed to rising inflation in Switzerland.

In August, the country's annual inflation rate doubled to its highest in nearly two years, with concerns about smaller harvests and lower water levels affecting transport routes like the Danube and the Rhine.

SNB Chairman Martin Schlegel told radio station SRF that while hot weather has affected food prices, it is not a major factor behind rising inflation. He attributed most of the increase to petroleum products.

The SNB held its benchmark interest rate at 0% last Thursday, unlike other central banks that have hiked borrowing costs to tackle inflation linked to higher fuel prices.

Schlegel expects inflation to decline after a temporary increase and remain within the SNB's target range of 0% to 2% by mid-2029. He believes the price of crude oil will decrease, leading to a gradual decline in its impact on prices.