Switzerland keeps rates unchanged; stops bond purchase
11 Dec 2009
The Swiss National Bank (SNB) reiterates its commitment to counteract any excessive appreciation of the Swiss franc and maintains its target band for the 3-month Swiss franc London interbank offered rate (LIBOR) at 0.00-0.75 per cent.
The central bank will continue to aim to keep the LIBOR at 0.25 per cent and would provide the economy generously with liquidity as uncertainties remained high, SNB chairman Jean-Pierre Roth told a news conference yesterday.
SNB will also discontinue its bond purchase programme, the first sign it was easing drastic measures adopted in March to fight recession along with other countries.
Total bond purchases since March this year amounted to about 3 billion Swiss franc ($2.9 billion) and the bank has hardly made any purchases since mid-September, with improvement in market conditions.
''We continue to expect the SNB to gradually withdraw from its emergency setting of monetary policy during 2010 - but likely not before mid-year at the earliest,'' Roth said.
The SNB does see improvements in both the domestic and global economy, but emphasises that the recovery remains fragile and that there is still considerable uncertainty over how the situation will develop.
