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SNB holds rates, sticks to unconventional measures

Published 06/18/2009, 03:33 AM
Updated 06/18/2009, 03:40 AM
TGT
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BERNE, June 18 (Reuters) - The Swiss National Bank kept up on Thursday its drastic measures to fight recession and fend off deflation, renewing its policy of ultra-low interest rates, bond purchases and intervention to stop the Swiss franc rising.

The central bank said after its quarterly policy meeting that its target band for the 3-month Swiss franc LIBOR will remain at 0.00-0.75 percent. It will continue to aim to get the LIBOR down to 0.25 percent.

All economists polled by Reuters had expected the central bank to leave interest rates unchanged. A vast majority also saw the SNB continuing with its unconventional policy measures as the Swiss economy faces its worst recession in over 30 years.

The economy shrank 0.8 percent in the first quarter, the worst quarterly decline since 1992. Back in March, the SNB had already forecast a decline in gross domestic product of 2.5-3.0 percent in 2009, which would be the biggest drop since 1975.

Consumer prices dropped 1 percent on the year in May, posting the steepest fall in 50 years.

(Reporting by Sven Egenter; editing by David Stamp)

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