Thursday, September 15, 2011

The SNB Promises to Enforce Minimum Exchange Rate

The Swiss National Bank on Thursday said it will keep its official interest rate at zero and reiterated its strong commitment to defending the floor it established earlier this month for the EURCHF rate at 1.20 francs.

"The Swiss National Bank will enforce the minimum exchange rate ... with the utmost determination. It is prepared to buy foreign currency in unlimited quantities," the SNB said in a statement following its regular policy meeting.

The SNB said it expects gross domestic product to grow by 1.5% to 2% in 2011, due only to a strong first half. The SNB previously forecast 2011 growth of 2% in June. The SNB cut its inflation forecast, projecting a rate of 0.4% in 2011 versus a June forecast of 0.9%. The bank expects an inflation rate of negative 0.3% in 2012 and a 2013 rate of 0.5%. The SNB previously forecast a rate of 1% in 2012 and 1.7% in 2013

Posted by David Frank, Avafx