Federal Council adjusts interest rates for COVID-19 credits
Bern, 29.03.2023 - During its meeting on 29 March 2023, the Federal Council decided to increase the interest rates for outstanding COVID-19 credits with effect from 31 March 2023. The interest rate will now be 1.5% for credits up to CHF 500,000 and 2% for credits exceeding CHF 500,000. The Federal Council is thus taking account of interest rate developments.
The COVID-19 Joint and Several Guarantee Act makes provision for the Federal Council to adjust the interest rates on COVID-19 credits in line with market developments, with effect from 31 March each year. When this financial assistance was launched in March 2020, the interest rate was 0.0% for credits up to CHF 500,000 and 0.5% for credits exceeding CHF 500,000. The review in 2021 and 2022 did not result in a rate adjustment, as the reference rates were in negative territory.
When setting the interest rates for COVID-19 credits, the Federal Council takes various factors into account, including the level of the SNB policy rate. This currently stands at 1.5%. During its meeting on 29 March 2023, the Federal Council decided to raise the interest rates for COVID-19 credits. From 1 April 2023, the rate on credits up to CHF 500,000 will be 1.5%, and that on credits exceeding CHF 500,000 will be 2%.
The interest rate adjustment creates an incentive for not holding COVID-19 credits any longer than necessary. This reflects both the original aims of the credit programme – bridging COVID-related liquidity shortfalls – and taxpayers' interest in having as few defaults as possible.
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