Switzerland has officially entered a zero-interest rate era as the Swiss National Bank (SNB) cuts its benchmark rate from 0.25% to 0.0% to counter deflation and sluggish growth. SNB President Thomas Jordan emphasized that the move is a long-term adjustment aimed at stabilizing inflation and ensuring global competitiveness.

Key factors behind the decision include low inflation, a strong franc, and weak growth forecasts. The policy shift is expected to lower mortgage rates, boost housing demand, and reduce financing costs for businesses, though it poses challenges for savers and banks.

The franc weakened slightly post-announcement, offering relief to exporters. Critics warn of potential asset bubbles, reduced bank margins, and long-term economic stagnation akin to Japan.

The SNB has signaled openness to further interventions, including quantitative easing, marking a transformative moment in Swiss monetary policy..