Thursday, March 15, 2012

Swiss National Bank Keeps Monetary, Currency Policy Unchanged

The Swiss National Bank kept its target for the 3-month franc LIBOR steady at 0-0.25 percent, and reaffirmed its commitment to the EURCHF 1.20 floor set on the 6th of September.  The Bank said it "will continue to enforce the minimum exchange rate of CHF 1.20 per euro with the utmost determination. It is prepared to buy foreign currency in unlimited quantities for this purpose. The target range for the three-month Libor will remain unchanged at 0.00–0.25%. The SNB will continue to maintain liquidity on the money market at an exceptionally high level."

The SNB intensified its currency measures late last year.  Switzerland reported annual consumer price inflation of -0.9% in February, -0.5% in November, 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 1.3% on an annual basis in the December quarter (1.6% in Q3, 2.3% in Q2 and 2.5% in Q1).  The Swiss franc (CHF) last traded around 1.21 against the Euro, and 0.92 against the US dollar.


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