(fxcue news) - Amid easing inflationary pressures, the Swiss National Bank reduced its benchmark rate by a sharper-than-expected 50 basis points to curb the strength of the Swiss franc. At the first policy meeting of Martin Schlegel as chairman, the policy rate was lowered to 0.50 percent from 1.00 percent. The new rate takes effect on December 13. The bank has cut its rates four times this year. Markets anticipated only a quarter point reduction. Banks' sight deposits held at the central bank will be remunerated at the SNB policy rate up to a certain threshold, and at 0 percent above this threshold, the bank said. The bank said underlying inflationary pressures decreased again and it will continue to monitor the situation closely, and will adjust its policy if necessary to ensure price stability over the medium term. Further, the bank said it remains willing to be active in the foreign exchange market as necessary. However, the bank made no reference to the valuation of the franc. The SNB today downgraded its inflation projections for 2024 and 2025. Inflation is expected to 1.1 percent in 2024, down from 1.2 percent estimated in September. The projection for 2025 was reduced to 0.3 percent from 0.6 percent. Meanwhile, the bank slightly lifted its inflation outlook for 2026 to 0.8 percent from 0.7 percent. The SNB forecast the economy to expand around 1 percent in the current year. Growth is expected to pick up somewhat next year, albeit only slightly due to the moderate global economic activity, the bank said. The SNB currently expects growth of between 1 percent and 1.5 percent next year. The bank had previously projected around 1.5 percent growth. The policy statement implies that this would be the final rate cut of the cycle as it removed any mention of further cuts, Capital Economics' economist Adrian Prettejohn said. However, the economist expects at least one more rate cut next year as policymakers will be forced to revise down their expectations for inflation over their forecast horizon.