The Swiss National Bank withdrew the minimum rate established for the Swiss franc against the euro, the main focus of monetary policy over three years ago and fell to -0.75% interest rates.
The Swiss National Bank (SNB) retired the minimum rate established for the Swiss franc against the euro, the main focus of monetary policy over three years , and lowered interest rates to -0.75%, said Thursday.
Following these measures, the European single currency lost 29% of its value against the Swiss franc and was trading at 0.85 Swiss francs compared to 1.20 francs on Wednesday. At the same time, the Swiss Exchange slumped 6.6 percent.
The main interest rate, the fluctuation of the Libor three months, has been revised downwards from an area ranging from the -1.25% -0.25% and instead of -0.75% to 0.25% effective so far, said in a statement.
“For deletion (the minimum change) does not involve a tightening inappropriate monetary conditions, the National Bank lowers interest rates significantly, “said the company.
The Swiss central bank justified this decision by disparities between monetary policies that have resulted in the weakening of euro against the dollar, as a result of the depreciation of the Swiss franc against the greenback.
“In this context, the National Bank has concluded that it is no longer justified to maintain the minimum change” said in the statement.
In September 2011, during the crisis of the euro, the SNB imposed a minimum exchange rate of 1.20 Swiss francs per euro, to fight the revaluation of the currency, a value ultimate safe haven, which seriously affected the Swiss export companies.
At first, this move paid off, but the Swiss franc has constantly reassessed throughout 2014 regarding currency only.
The strength of the Swiss franc franc to the euro, which began to take hold with the crisis in Ukraine, was accentuated throughout the year due to growing differences between monetary policy of the Central Bank Bank (ECB) and the US Federal Reserve (Fed) between the SNB has been caught.
In December, before the shocks experienced in the currency markets following the collapse of the ruble The SNB was forced to proceed to a new setting and imposed a negative rate for deposits of banks in the state.
In the future, the SNB will continue to take account of developments in markets currency to define its monetary policy, said Thursday.
“We also intervene if necessary in this market in order to influence monetary conditions” he says.
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