SNB Holds Negative Interest Rates; Cuts Inflation Outlook

The Swiss National Bank kept its expansionary monetary policy unchanged on Thursday and trimmed its inflation forecast reflecting weak price pressures.

The interest rate on sight deposits at the central bank was kept unchanged at -0.75 percent and the target range for the three-month Libor was retained between -1.25 percent and -0.25 percent.

The SNB reiterated that the Swiss franc is “still significantly overvalued”.

The central bank said the negative interest rate and its willingness to intervene in the foreign exchange market are intended to make Swiss franc investments less attractive.

The SNB forecast 0.3 percent inflation for this year, the same as predicted in March. For 2018, the bank lowered its outlook to 0.3 percent from 0.4 percent.

For 2019, the bank projected 1 percent inflation instead of 1.1 percent estimated in March.

SNB Chief Thomas Jordan said the expansionary…

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