Switzerland exited the era of negative interest rates on Thursday when its central bank joined others around the world in tightening monetary policy more aggressively to combat resurgent inflation, Reuters reported. The Swiss National Bank (SNB) raised its policy interest rate by 0.75 of a percentage point, ending the country's seven-and-a-half year experiment with negative rates which sparked opposition from its financial sector and fears of asset bubbles. The increase to 0.5%, from minus 0.25%, followed a 50 basis point hike in June from minus 0.75%, the SNB's first rate hike in 15 years. Swiss government bond yields fell after Thursday's move, reversing course following an initial spike, while the franc dropped broadly, falling against the dollar, euro and pound as markets had priced in a 100 basis point rate hike by the SNB. The central bank did not exclude more rate rises to come. "It cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term," SNB Chairman Thomas Jordan told a news conference.
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