Switzerland's central bank on Thursday abandoned negative interest rates with a big rate hike in its effort to tame rising inflation.
The Swiss National Bank said in a statement that it was raising its policy rate by 0.75 percentage points to 0.5 percent.
The SNB, which first pushed its rates down into negative territory in January 2015, said the move was needed to counter "the renewed rise in inflationary pressure and the spread of inflation to goods and services that have so far been less affected".
It said the policy rate change would take effect on Friday, and that "it cannot be ruled out that further increases in the SNB policy rate will be necessary to ensure price stability over the medium term."
The central bank also said it was "willing to be active in the foreign exchange market as necessary, ... to provide appropriate monetary conditions."
The negative rate meant that depositors had to pay to park their money at the bank.
The bank, which back in June hiked its interest rate for the first time in 15 years, has joined a global tightening of monetary policy to tame inflation.
Inflation in Switzerland rose 3.5 percent in August and is "likely to remain at an elevated level for the time being," it said.
"The latest rise in inflation is principally due to higher prices for goods, especially energy and food," it added.
Given the new rate hike, which should rein in price hikes, the bank said it now forecasts that inflation should gradually decline to 3 percent for the full year 2022, 2.4 percent for 2023 and 1.7 percent for 2024."Without today’s SNB policy rate increase, the inflation forecast would be significantly higher," it said.