SNB Keeps Rates Unchanged Signals Intervention to Devalue Franc

The Swiss National Bank kept a charge on some cash deposits steady at -0.75 percent on Thursday, but said it would remain active in foreign exchange markets to weaken what it sees as a “significantly overvalued” franc.

The central bank kept its target range for the three-month Libor at -1.25 to -0.25 percent, as analysts polled by Reuters had expected.

The SNB said it will continue to take account of the strong franc and its potential effect on inflation and economic developments in steering monetary policy.

“It will therefore remain active in the foreign exchange market, as necessary, in order to influence monetary conditions,” the SNB said in a statement.

The SNB abandoned a formal cap on the value of the Swiss franc in January in the face of further easing from the European Central Bank, sending the currency crashing through its 1.20 per euro limit.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza