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11 Dec 2014
SNB held key rates unchanged, vowed to defend the cap on Franc
FXStreet (Mumbai) - The Swiss National Bank (SNB) held the target range for its benchmark interest rates unchanged at 0 to 0.25%, while maintaining the ceiling on Franc at 1.20 per Euro.
The Central bank mentioned that the inflationary pressures are likely to cool down in the next year. Moreover, the rising Franc has increased the threat of deflation. The Franc hit a 26-month high versus the euro in the last month as the investors are braced for more easing in the Eurozone. This has pushed the Franc towards the SNB’s upper limit.
“Overall, the global economic outlook is still dominated by downside risks –- the most important of which are the continuing difficult conditions in the euro area and a possible escalation in geopolitical tensions,” the SNB said in its statement. “If required, the SNB will take further measures immediately.”
The bank also cut forecasts for consumer prices for 2014 and the following two years. CPI is expected to drop 0.1% in 2015, before rising by 0.3% in 2016. The previous projections stood at 0.1% and 0.5% for each year respectively.
The EUR/CHF pair fell immediately after the Swiss National Bank (SNB) monetary policy announcement, as the central bank held rates unchanged with no negative rates announcement.
The Central bank mentioned that the inflationary pressures are likely to cool down in the next year. Moreover, the rising Franc has increased the threat of deflation. The Franc hit a 26-month high versus the euro in the last month as the investors are braced for more easing in the Eurozone. This has pushed the Franc towards the SNB’s upper limit.
“Overall, the global economic outlook is still dominated by downside risks –- the most important of which are the continuing difficult conditions in the euro area and a possible escalation in geopolitical tensions,” the SNB said in its statement. “If required, the SNB will take further measures immediately.”
The bank also cut forecasts for consumer prices for 2014 and the following two years. CPI is expected to drop 0.1% in 2015, before rising by 0.3% in 2016. The previous projections stood at 0.1% and 0.5% for each year respectively.
The EUR/CHF pair fell immediately after the Swiss National Bank (SNB) monetary policy announcement, as the central bank held rates unchanged with no negative rates announcement.