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SNB leaves interest rate on sight deposits unchanged at -0.67 per cent

FXStreet (Mumbai) - The Swiss National Bank (SNB) decided to maintain its expansionary monetary policy. 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%.

The negative interest rate and the interest rate differential with other currencies has caused the franc less attractive. The SNB will remain active in the foreign exchange market in order to influence the exchange rate situation whenever deemed necessary. The negative interest rate and the SNB’s willingness to intervene in the foreign exchange market are required to ease pressure on the franc, SNB noted.

After the smaller than expected package announced by the European Central Bank on 3rd December, all eyes were on the Swiss National Bank’s (SNB) December meeting. Barclays had expect the SNB to take a "wait and see" approach when it meets tomorrow while the market consensus was tilted towards no change in policy.

Given that Switzerland is surrounded by euro countries, it has always helped the Swiss central bank to pay attention to the ECB’s policies. The ECB disappointed the market last week by only cutting the deposit rate by 10 basis points and by extending QE by 7 months. QE was not expanded. The SNB had implemented negative interest rates previously in order to maintain the EU and Swiss rates difference.

Switzerland SNB Interest Rate Decision meets forecasts (-0.75%)

Switzerland SNB Interest Rate Decision meets forecasts (-0.75%)
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