The Swiss National Bank (SNB) lowered its main interest rate to just above zero on Thursday, citing growing uncertainty regarding the global effects of US President Donald Trump's trade policies.

This move marked the fifth consecutive rate cut since March 2024, with the SNB reducing its policy rate by a quarter point to 0.25%.

The decision came after assessing that inflation was well-controlled and could potentially decrease further, Reuters reports.

The rate cut aligned with economists' predictions, and markets now expect the SNB to keep rates steady for the time being as it monitors the global economic landscape.

SNB Chairman Martin Schlegel noted that uncertainties had increased “significantly.”

Following the decision, the Swiss Franc saw a slight depreciation against both the Euro and the Dollar.

“The SNB was not only the first big central bank to have started cutting rates in this cycle, with this step today, it likely is also the first one to have finished cutting rates,” stated Karsten Junius, chief economist at Bank J. Safra Sarasin.

“The upward revisions of inflation profile indicate that no further rate cut is needed.”

The SNB Chairman stated that the outlook for Swiss inflation was uncertain, with risks mainly leaning towards a decline due to slower global economic growth and the potential strengthening of the safe-haven Swiss Franc.

“There is a lot back and forth going on with economic and tariff policy at the moment,” Schlegel told reporters.

“Many things are announced and then not introduced and then announced again. That makes weighing up the whole situation very difficult.”

The new 0.25% rate is the lowest for the SNB since September 2022, bringing it close to sub-zero interest rates, a move the bank has not ruled out in the past.

Schlegel was careful about the SNB's future direction, stating that the bank would only make decisions on its policy after analysing data ahead of its next meeting in June.

The rate cut is aimed at preventing a further drop in Swiss inflation, which fell to 0.3% in February, its lowest level in almost four years, while ensuring it stays within the central bank's 0-2% target range for price stability.

The SNB stated that its baseline scenario projected moderate global growth in the coming quarters, with underlying inflationary pressures, particularly in Europe, gradually easing.