On Thursday morning, the Swiss National Bank stated it would increase its benchmark interest rate by 50 basis points, temporarily bringing it to 1.5 percent. The rise in the policy rate is consistent with expert estimates, marking the fourth straight increase in the past year.

According to a Reuters survey of economists conducted on Wednesday, the Swiss National Bank will likely follow the European Central Bank's lead and raise interest rates despite the upheaval on the financial markets.

According to a recent prediction by the Swiss National Bank, annual inflation will be 2.6% in 2023, 2% in 2024, and 2% in 2025. By the end of 2025, inflation is predicted to be 2.1%. Currently, domestic inflation is significantly higher than the Swiss National Bank's target range of 0% to 2%.

Despite consumer prices being only a small portion of the skyrocketing rates of the nation's European neighbours, Swiss inflation increased to 3.4% in February year over year, above analyst estimates, the note stated.

The Swiss National Bank has been in the news extensively during the past week after first deciding to lend troubled lender Credit Suisse up to $53.68 billion.

With the announcement that its largest investor, Saudi National Bank, would not be providing additional financial support, Credit Suisse's shares fell to a new low.

Notwithstanding the turbulence in the financial sector, the US Federal Reserve raised interest rates by 25 basis points on Wednesday.

Even the European Central Bank made a rate increase announcement of 50 basis points last week. In light of recent volatility in the banking industry, it stated in its note that it is prepared to provide liquidity to banks if necessary. As long as inflation in the 20-member zone continues to be well above the targeted level, the European Central Bank (ECB) has been indicating for several weeks that it will raise rates once again at its meeting in March.

Preliminary figures for February indicated headline inflation of 8.5%, significantly more than the central bank's target of 2%.