BERN: The Swiss National Bank decided to hike interest rates by half a percentage point because inflation had spread to goods and services not affected by the war in Ukraine and the global pandemic, SNB Chairman Thomas Jordan said on Thursday.

“In the current environment, price increases were being passed on more quickly, and are also being more readily accepted, than was the case until recently,” Jordan said in remarks prepared for a news conference after the SNB’s first rate hike in 15 years.

Swiss National Bank to leave rates steady in June, raise 25 bps in Sept

“There is the threat of second-round effects becoming entrenched if inflation remains above 2% for a long period,” he added.

He said the Swiss franc was no longer highly valued because of recent depreciation, and that the SNB was ready to intervene in markets to check excessive appreciation or weakening of the franc.