Swiss central bank maintains ultra-low rates
The Swiss National Bank on Thursday kept its key interest rate unchanged, sticking to its monetary policy as it raised its economic growth forecast for 2013.
The SNB held its target range for the Swiss franc's three-month London interbank offered rate (Libor) at zero to 0.25 percent, a bank spokesman said in a conference call with journalists.
The bank also increased its forecast for gross domestic product (GDP) growth for 2013 to a range of 1.5-2.0 percent, up from 1.0-1.5 percent.
SNB also repeated its longstanding pledge to prevent the Swiss franc from gaining too much value against the euro, reiterating that it would buy as much foreign currency as necessary to maintain a two-year-old exchange-rate floor of 1.20 francs to the euro.
"It's true the situation on the international financial markets has loosened slightly, but the minimum level is still indispensable in a context where the three-month Libor rate is close to zero," the bank said in a statement.
"It enables us to prevent an untimely hardening of monetary conditions if upward pressure on the franc resumes."
Investors unsettled by the eurozone debt crisis and uncertain global economic climate have flocked to the Swiss franc as a perceived safe haven, driving up its value to the detriment of the country's exporters.
The upwardly revised GDP forecast came after second-quarter growth came in at a better-than-expected 0.5 percent.
Separately, the State Secretariat for Economic Affairs on Thursday also revised its growth forecast upward for 2013 and 2014, citing a strong domestic economy, driven in part by immigration.
The SNB also raised its inflation forecast for 2013 and 2014.
It predicted consumer prices would fall by 0.2 percent this year, up from its previous prediction of -0.3 percent, and rise by 0.3 percent in 2014, up from 0.2 percent.
It left its inflation outlook for 2015 unchanged at 0.7 percent.
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The SNB held its target range for the Swiss franc's three-month London interbank offered rate (Libor) at zero to 0.25 percent, a bank spokesman said in a conference call with journalists.
The bank also increased its forecast for gross domestic product (GDP) growth for 2013 to a range of 1.5-2.0 percent, up from 1.0-1.5 percent.
SNB also repeated its longstanding pledge to prevent the Swiss franc from gaining too much value against the euro, reiterating that it would buy as much foreign currency as necessary to maintain a two-year-old exchange-rate floor of 1.20 francs to the euro.
"It's true the situation on the international financial markets has loosened slightly, but the minimum level is still indispensable in a context where the three-month Libor rate is close to zero," the bank said in a statement.
"It enables us to prevent an untimely hardening of monetary conditions if upward pressure on the franc resumes."
Investors unsettled by the eurozone debt crisis and uncertain global economic climate have flocked to the Swiss franc as a perceived safe haven, driving up its value to the detriment of the country's exporters.
The upwardly revised GDP forecast came after second-quarter growth came in at a better-than-expected 0.5 percent.
Separately, the State Secretariat for Economic Affairs on Thursday also revised its growth forecast upward for 2013 and 2014, citing a strong domestic economy, driven in part by immigration.
The SNB also raised its inflation forecast for 2013 and 2014.
It predicted consumer prices would fall by 0.2 percent this year, up from its previous prediction of -0.3 percent, and rise by 0.3 percent in 2014, up from 0.2 percent.
It left its inflation outlook for 2015 unchanged at 0.7 percent.
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