SNB keeps rates unchanged

The Swiss National Bank (SNB) announced today that it will maintain its accommodative monetary policy whilst presenting a moderately optimistic growth outlook for Switzerland.

The target range for the three-month Libor remains at between –1.25% and –0.25%, and the interest rate on sight deposits with the SNB is unchanged at –0.75%, in a bid to ease the continuing upwards pressure on the Franc.

The central bank also pledged that it will continue to remain active in foreign exchange markets in order to stave off further appreciation.

The central bank remains cautiously optimistic. Although depreciating the Swiss growth outlook slightly downwards, it still expects real growth of just under 1% in 2015, for 2016, it expects the Swiss economy to grow by 1.5%.

Christian Lips, analyst at German NORD/LB comments on the decision: “Due to the relatively moderate ECB easing policy announced last week, an excessive Franc appreciation has been prevented. Meanwhile, the SNB is well advised to keep its monetary policy powder dry. Geopolitical conflicts, China and financial market turbulence all constitute potential risk factors which could lead to a further flight to the Swiss Franc.”

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