Returning to positive interest rates in Switzerland will affect the central bank: experts – the world

Geneva, September 19 (EFE). This week, Switzerland is expected to raise interest rates on short-term deposits from -0.25% to 0.25% or even 0.5%, a return to positive figures after eight years that could cost the Swiss central bank billions of euros, experts warned in the local press.

According to the newspaper “Tribune de Genève”, the end of this “free money” will force the Swiss National Bank to pay billions to financial institutions that have assets deposited with it, and it is estimated that each quarter-point increase could cost. It has about 1800 million Swiss francs (1860 million euros).

This is because in recent months, in order to compensate for the strength of the Swiss franc, the issuing bank has bought large amounts of foreign currency from private banks, resulting in an excess liquidity of 700 billion francs (725,000 million euros), 20 times more than before the financial crisis.

Negative interest indicates that the National Bank even received income from these operations, a situation that can be reversed next Thursday on the twenty-second of the month, when an interest rate hike is expected.

Experts estimate that the interest rate could reach 1% in the future and this could cost the central bank up to 7 billion Swiss francs (7.25 billion euros).

This also happens at a time when the reserve fund in which the central bank has to redistribute profits to the cantons and central government is practically empty after losses of 95,000 million francs (98,000 million euros) in the first semester.

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