Central Bank of Switzerland Adopts Zero Interest Rate Policy: Examining CHF-Bitcoin Investment Strategy
The Swiss National Bank (SNB) is making headlines by slashing its interest rates to a whopping 0%, marking a significant shift in monetary policy for a major bank in a developed economy since 2021.
Interestingly, other central banks in developed economies have been steering clear of zero or nearly zero rates since then, due to concerns about inflation and the state of economic recovery.
For instance, the Federal Reserve in the United States has kept its target federal funds rate well above zero, with rates ranging from 4¼ to 4½ percent by mid-2025. The Fed has been cautious in adjusting rates, clearly showing no intention of adopting a Zero Interest Rate Policy (ZIRP) since 2021.
Similarly, the European Central Bank (ECB) and other major central banks haven't returned to ZIRP in their monetary policy. They've been managing rates, focusing on controlling inflation and showing no signs of implementing ZIRP anytime soon.
On the other hand, emerging markets like Brazil have taken a different approach, raising interest rates to combat inflation rather than adopting ZIRP. By 2025, Brazil's Selic rate had reached an impressive 14.75%, demonstrating tightening, not easing, monetary policy.
Overall, since 2021, major banks in developed countries have opted against implementing ZIRP; instead, they've been tightening monetary policy with higher interest rates to manage inflation and economic dynamics. So, the SNB's move is a rare one in the current global economic climate.
The Swiss National Bank's decision to slash interest rates to zero percent is unusual, given that other major central banks in developed economies have been avoiding such low rates since 2021 and instead, have been managing their business and finance sectors by focusing on tightening monetary policy to control inflation.
In the case of the Federal Reserve, its target federal funds rate remains well above zero, avoiding the Zero Interest Rate Policy (ZIRP) that the SNB is now adopting.
