The Swiss National Bank raised its policy interest rate for the first time in 15 years in a surprise move on Thursday and said it was ready to hike further, joining other central banks in tightening monetary policy to fight resurgent inflation.
The central bank increased its policy rate to minus 0.25% from the minus 0.75% level it has deployed since 2015, sending the safe-haven franc sharply higher. Nearly all the economists polled by Reuters had expected the SNB to keep rates steady.
It was the first increase by the SNB since September 2007, and followed a 0.75 percentage point hike in borrowing costs by the US Federal Reserve on Wednesday.
Other central banks are also raising interest rates as they attempt to cool inflation driven higher by surging fuel and food prices that are straining budgets for households and businesses.
The Bank of England raised UK interest rates by a quarter point on Thursday.