The Swiss National Bank raised interest rates as expected by a large margin at its meeting moments before from -0.25% to 0.50% after raising it by 50 basis points at its June meeting.

The bank’s interest statement stated that there were renewed inflationary pressures on goods and services that forced the bank to take the step of raising interest rates, stressing that more interest increases would be necessary in the future to achieve price stability.

The inflation rate in Switzerland reached 3.5% in August and is likely to remain at a high level at the present time, especially with the reasons for the rise in commodity prices, especially energy and food.

The bank expects inflation to average 3% this year before declining to 2.4% next year and to 1.7% in 2024.

The Swiss franc is trading at 0.9740 levels against the US dollar, down by more than 100 pips, because the move was widely expected in the markets and was affected by the US dollar’s rise.