Thursday, September 15, 2011

Swiss National Bank Holds Rate Target at 0-0.25%

The Swiss National Bank held its target for the 3-month franc LIBOR unchanged at 0-0.25 percent, and reaffirmed its commitment to the EURCHF 1.20 floor set on the 6th of September.  The Bank said: "The Swiss National Bank will enforce the minimum exchange rate of CHF 1.20 per euro set on 6 September with the utmost determination. It is prepared to buy foreign currency in unlimited quantities. It continues to aim for a three-month Libor at zero and will maintain total sight deposits at the SNB at significantly above CHF 200 billion."

At its June meeting this year the Swiss National Bank maintained the interest rate unchanged at 0.25%.  The SNB intensified its currency measures over the past two months.  Switzerland reported annual consumer price inflation of 0.2% in August, compared to 0.50% in July, meanwhile, the Bank is forecasting inflation of 0.4% during 2011, while 2012 inflation is expected at -0.3% and 0.5% in 2013.  The Swiss economy grew 2.3% on an annual basis in the June quarter (2.5% in Q1).  The Swiss franc (CHF) last traded around 1.2060 against the Euro, and 0.877 against the US dollar.


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