Switzerland

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.

A Swiss court has granted the operating company for the never-opened Nord Stream 2 pipeline, which was built to bring Russian gas to Germany but put on ice shortly before Russia invaded Ukraine, a four-month extension to its “stay of bankruptcy,” the Associated Press reported. The stay for Nord Stream 2 AG was extended from Sept. 10 through Jan. 10 by a regional court in Zug canton (state), according to a notice published Thursday in the Swiss Official Gazette of Commerce. The company, a subsidiary of Russia’s Gazprom, is based in Zug.

Sanctioned Russian lender Sberbank PJSC caused the bankruptcy of the Antipinsky Oil Refinery in Western Siberia, according to Swiss trader New Stream Trading AG, Bloomberg reported. Sberbank “had full control of the management of Antipinsky” from mid-November 2018 and took steps leading to it “procuring the breaches” of the refinery’s existing contracts, NST said, quoting from a ruling by a tribunal constituted under the London Court of International Arbitration.

Ongoing inflationary pressure means further monetary policy tightening will likely be needed, Swiss National Bank Chairman Thomas Jordan said on Wednesday, after the central bank last week raised its interest rate for the first time in 15 years, Reuters reported. "We published a new inflation forecast. If you interpret it correctly, you see that there's a certain need probably to tighten further," Jordan told a conference in Zurich. "We don't exactly know when and how much, but this inflationary pressure is not yet combated completely," Jordan added.

The Treasury Department said on Friday that it was concerned that some of America’s trading partners were taking actions to weaken their currencies and gain unfair trade advantages against the United States — but declined to label any country a currency manipulator, the New York Times reported. In its semiannual foreign exchange report, the department singled out Switzerland, which in 2020 was deemed a manipulator, as a worst offender and said it was closely watching the foreign exchange practices of Taiwan and Vietnam.

The Swiss National Bank will tighten monetary policy if inflation in Switzerland remains persistently high, governing board member Andrea Maechler said in an interview published on Monday, Reuters reported. The European Central Bank on Monday became the latest institution to signal it was hiking rates to combat soaring inflation, following similar moves by the U.S. Federal Reserve and the Bank of England. The SNB could follow suit, should Swiss inflation remain outside its target range 0-2%. April saw the highest inflation rate in Switzerland for 14 years, with prices rising by 2.5%.

Credit Suisse said on Monday that litigation related to Greensill supply chain finance funds (SCFF) could take around five years and warned that some investors would not be able to recover their money, Reuters reported. Credit Suisse racked up a 1.6 billion Swiss franc ($1.73 billion) loss last year when it was hit by the implosion of investment fund Archegos and the collapse of $10 billion in SCFFs linked to insolvent British financier Greensill.

Credit Suisse Group AG shareholders proposed a special audit over the collapse of a group of supply chain finance funds it ran with now-defunct Greensill Capital, after the bank refused to publish an internal report on the matter, Bloomberg News reported. The lender urged shareholders to vote against the proposal at the bank’s annual general meeting next month, saying it could complicate efforts to recover investor money that remains locked up more than a year after it was frozen. The audit is being proposed by the Ethos Foundation and seven Swiss pension funds.

Swiss trader Mercuria Energy Group Ltd. secured a $2 billion emergency credit facility from banks as commodities prices surge following Russia’s invasion of Ukraine, Bloomberg News reported. The credit facility, which was secured earlier this month, can be renewed or closed in six months time. Trading houses have been seeking funds to maintain their physical and derivative positions as prices of everything from natural gas to metals soar. With markets upended and sanctions threatening to disrupt raw materials supplies, traders are facing a liquidity squeeze that could reshape the sector.