Central banks in Europe have responded differently to the prolonged period of high energy prices, with Switzerland and Sweden holding their key interest rates steady Thursday but Norway raising borrowing costs.

The Swiss National Bank left its policy rate unchanged as expected at 0% for the fifth straight quarterly meeting, while Sweden's Riksbank continued to hold its key rate at 1.75%, where it has been since last September. Norway's Norges Bank raised its policy rate to 4.5% from 4.25%.

Higher fuel prices since the closure of the Strait of Hormuz have prompted central banks globally to increase borrowing costs in an effort to contain inflation, although at different speeds. The European Central Bank and Federal Reserve raised interest rates this month, while the Bank of England left its key rate unchanged.

But while the annual rate of inflation has moved above the targets set by central banks in most economies, the pace of price rises in Switzerland and Sweden has remained subdued given these countries' low reliance on imported fossil fuels.

Medium-term inflationary pressure has increased only slightly since June's meeting, the SNB said. The Riksbank noted that inflation is low due to temporary tax cuts on transport and food, but indicators suggest price growth will accelerate soon.

By contrast, inflation in Norway has been above target for several years, amid high wage growth and energy costs. A somewhat tighter monetary-policy stance is needed to return inflation to target, Norges Bank said.

"It will likely be necessary to keep the policy rate elevated for a time, and the Committee is prepared to raise the policy rate further if needed to bring inflation down to the 2% target within a reasonable time horizon," Norges Bank Governor Ida Wolden Bache said.

Switzerland and Sweden are less exposed to the energy price swings felt by countries in the eurozone due to lower reliance on imported oil and gas from the Middle East. However, Switzerland's inflation rate has picked up due to higher energy costs, and economic growth was--like in Sweden and Norway--surprisingly strong in the second quarter.

While economists vary on their forecasts for the SNB's interest rate, investors expect the bank to hike twice by a quarter-point by June 2027, according to LSEG. The SNB, nevertheless, indicated it was in no rush to act, saying monetary policy is appropriate to keep inflation at target.

Switzerland's central bank earlier this year expressed concern over the appreciation of the franc, given the currency's status as a safe haven for investors during times of geopolitical uncertainty. A stronger franc lowers inflation and makes exports less competitive.

However, at Thursday's meeting, the bank removed a section of its communication expressing increased willingness to counter a rapid and excessive appreciation of the Swiss franc.

After the rate decisions, the Swiss franc was slightly down, while the Norwegian krone and Swedish krona were a little up against the euro.

In Sweden, the krona has depreciated for months against the euro, which alongside stronger economic activity and continued supply shocks from the war, is prompting the Riksbank to act. The krona has lost around 4% against the single currency in the past six months.

The central bank said it is expected that the increases to its policy rate will begin this year. Investors expect at least four quarter-point hikes in Sweden by June next year.