Inflation has fallen to the upper limit of the Swiss National Bank's target level, but it will still raise interest rates by 25 basis points.

　　Officials of the Swiss National Bank (SNB) may not follow the example of other central banks to suspend interest rate hikes because the inflation rate has fallen to the target level, but will continue to tighten the policy in a preemptive manner.

　　Economists generally expect that on Thursday, the policy interest rate of Switzerland (SUI) will be raised by at least 25 basis points from the current 1.5%, although inflation has now almost dropped to the upper limit of 2% and has never reached the ultra-high level that other Western economies have just emerged from. Some investors even expect a 50 basis point interest rate hike.

　　Switzerland's inflation rate has almost dropped to the upper limit of 2% set by the Swiss Central Bank_ By Bloomberg

　　Part of the reason for continuing to tighten policies is that the Swiss Central Bank holds quarterly meetings, which means its actions are always lagging behind, resulting in a significant interest rate difference compared to other central banks. Since June last year, Swiss officials led by Thomas Jordan have only increased borrowing costs by 225 basis points, while the European Central Bank (ECB) and the Federal Reserve (Fed) have increased borrowing costs by 400 basis points and 500 basis points respectively.

　　Meanwhile, although the country's inflation rate has dropped to 2.2%, inflationary pressure still exists.

　　Alessandro Bi, economist of UBS, said: Jordan has made it very clear that inflationary pressure still exists. If they don't raise interest rates again and continue to sell foreign exchange, I would be very surprised. However, considering Switzerland's milder inflation situation, a larger 50 basis point measure may confuse investors. It can be imagined that a 25 basis point measure is being taken now, but foreign exchange sales need to be strengthened to make monetary policy sufficiently restrictive, And reduce the risk of price pressure spreading