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20 Mar 2014
SNB keeps minimum exchange rate steady in March
FXStreet (Łódź) - The Swiss National Bank decided to leave the minimum exchange rate unchanged at CHF 1.20 per euro on Thursday and is ready to enforce it if necessary “by buying foreign currency in unlimited quantities, and to take further measures as required,” as it is stated in the official document released after the decision was made known.
The target range for the three-month Libor rate was also kept unchanged at 0.0–0.25%.
The central bank explains that the CHF is still high and “with the three-month Libor close to zero, the minimum exchange rate continues to be the right tool to avoid an undesirable tightening of monetary conditions in the event of renewed upward pressure on the Swiss franc.”
SNB's current inflation forecast for Switzerland is at 0% for 2014 and at 0.4% for 2015, in both cases 0.2% lower than the previous estimates. In 2016 the central bank expects a 1.0% rise.
The SNB acknowledged the continued recovery in the EU in the fourth quarter of 2013 but pointed out that risks remained, such as low inflation, uncertainty about the health of Europe's banking system, political tensions and weakness in key emerging markets.
The target range for the three-month Libor rate was also kept unchanged at 0.0–0.25%.
The central bank explains that the CHF is still high and “with the three-month Libor close to zero, the minimum exchange rate continues to be the right tool to avoid an undesirable tightening of monetary conditions in the event of renewed upward pressure on the Swiss franc.”
SNB's current inflation forecast for Switzerland is at 0% for 2014 and at 0.4% for 2015, in both cases 0.2% lower than the previous estimates. In 2016 the central bank expects a 1.0% rise.
The SNB acknowledged the continued recovery in the EU in the fourth quarter of 2013 but pointed out that risks remained, such as low inflation, uncertainty about the health of Europe's banking system, political tensions and weakness in key emerging markets.