SNB: no changes to curb strong franc

The Swiss National Bank is ready to intervene in the currency markets again as it continues to battle the "significantly overvalued" Swiss franc, the central bank said Thursday after it kept its key policy rate unchanged in deeply negative territory.
The SNB's maintained its deposit rate at -0.75%, as expected by economists. It also maintained its three-month Libor target at -1.25% to -0.25%.

"The negative interest rate and the SNB's willingness to intervene in the foreign exchange market are intended to make Swiss franc investments less attractive, thereby easing pressure on the currency," the SNB said in a statement.

The negative interest rate and a readiness to intervene in the foreign currency markets have been the twin pillars of the SNB's strategy since it scrapped a cap on the franc versus the euro nearly two years ago.

The SNB expects that the moderate pace of global growth to continue in 2017, although the baseline scenario is subject to considerable risks, especially with uncertainty surrounding the Trump Administration. The bank also pointed to uncertainties surrounding the German and French national elections due next year.

The SNB lowered its inflation forecast by 0.1% for the next two years, predicting consumer prices will grow 0.1% in 2017 and 0.5% the year after. It predicts the economy will expand about 1.5% in 2016 and and 2017.