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15 Jan 2015
SNB ends minimum exchange rate lowers interest rate to -0.75%
FXStreet (Mumbai) - The Swiss National Bank surprised markets by announcing a discontinuation of a minimum exchange rate, while lowering the interest rate to -0.75%.
The central bank gave up the 4-year old 1.2 intervention line in the EUR/CHF exchange rate, following which the pair has dipped 9.99% to 1.0809. The bank lowered the interest rate on sight deposit account balances that exceed a given exemption threshold by 0.5 percentage points, to −0.75%.
Moreover, the bank lowered interest rates to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions. The bank also said it will continue to take account of the exchange rate situation in formulating its monetary policy in future and shall remain active in the FX market, if required.
The central bank gave up the 4-year old 1.2 intervention line in the EUR/CHF exchange rate, following which the pair has dipped 9.99% to 1.0809. The bank lowered the interest rate on sight deposit account balances that exceed a given exemption threshold by 0.5 percentage points, to −0.75%.
Moreover, the bank lowered interest rates to ensure that the discontinuation of the minimum exchange rate does not lead to an inappropriate tightening of monetary conditions. The bank also said it will continue to take account of the exchange rate situation in formulating its monetary policy in future and shall remain active in the FX market, if required.