Arab Today, arab today swiss central bank lowers growth outlook holds key rate
Last Updated : GMT 14:41:05
Arab Today, arab today
Arab Today, arab today

Swiss central bank lowers growth outlook, holds key rate

Arab Today, arab today

Arab Today, arab today Swiss central bank lowers growth outlook, holds key rate

The Swiss central bank
Geneva - AFP

Switzerland's central bank held its key interest rate steady on Thursday and restated its pledge to hold down the value of the Swiss franc, but warned the economic outlook had "deteriorated considerably".
The Swiss National Bank (SNB) maintained its target range for the franc's three-month London interbank offered rate, known as the Libor rate, at between 0.0 and 0.25 percent.
The bank also reiterated its longstanding commitment to maintain an exchange-rate floor of 1.20 Swiss francs to the euro.
But despite the floor and the historically low Libor, SNB warned that "the economic outlook has deteriorated considerably."
Analysts with Capital Economics said the bank's decision "to leave policy on hold comes as a slight disappointment," adding though that given the difficult economic climate "the Bank may well intervene in currency markets or cut its deposit rate before long."
Amid an international slump and especially weakness in the neighbouring eurozone, the wealthy Alpine nation acknowledged earlier this month that its economy unexpectedly stagnated in the second quarter.
SNB, which had previously forecast 2.0-percent economic growth for Switzerland in 2014, said Thursday it now expects to see the country's gross domestic product grow just 1.5 percent this year.
"The SNB expects that the global economic recovery will be weaker in the approaching quarters than previously forecast," it said.
- Exchange-rate floor vital -
In the difficult economic environment, the bank stressed the importance of keeping down the value of the Swiss franc.
"With the three-month Libor close to zero, the minimum exchange rate remains the key instrument to avoid an undesirable tightening of monetary conditions," SNB said.
It stressed that it therefore would "continue to enforce the minimum exchange rate with utmost determination," and that it was "prepared to purchase foreign currency in unlimited quantities" and if necessary to "take further measures immediately."
The J. Safra Sarasin analysis firm said the choice of phrase was important.
"This wording implies that, one, they would act in between the quarterly meetings if necessary and, two, they would also consider introducing measures like negative deposit rates," it said in a note.
The bank introduced the floor in September 2011 as a strengthening franc was creating headaches for exporters, whose margins were eroded by unfavourable exchange rates.
The Swiss franc is traditionally seen as safe haven by the markets in tough times, and investors unsettled by the eurozone debt crisis and uncertain global economic climate flocked to the currency, driving up its value.
The crisis in Ukraine has also led to intermittent spikes in the value of the franc, pushing it closer to the 1.20 limit.
In early September, it cost just 1.2045 francs to buy one euro.
"As the prospect of quantitative easing in the eurozone puts additional upward pressure on the franc, we suspect that the SNB will buy more foreign assets in the very near future," the Capital Economics analysis firm said.
The bank meanwhile maintained its inflation forecast for 2014 at 0.1 percent, but adjusted down its outlook for the coming two years.
"From mid-2015 and onwards, inflation is set to be lower," SNB said, saying it now expected 0.2-percent inflation next year instead of 0.3 percent.
For 2016, inflation is now expected to stand at 0.5 percent instead of the previous forecast of 0.9 percent.
"This is mainly due to the deterioration in the global economic outlook and slower growth in Switzerland," it explained.
"For Switzerland, the risk of deflation has thus increased again," it warned.

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today swiss central bank lowers growth outlook holds key rate Arab Today, arab today swiss central bank lowers growth outlook holds key rate

 



Arab Today, arab today
Arab Today, arab today Hats, scarves add beauty to women

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today Tourist guide reveals methods of tourist attractions

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Air raid kills eight women, child

GMT 06:42 2017 Friday ,17 February

Air raid kills eight women, child
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic
View News in Arabic - Business: مصارف
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Porsche reveals new 2018 Panamera

GMT 17:31 2017 Wednesday ,15 February

Porsche reveals new 2018 Panamera
Arab Today, arab today Actress Nadeen Al Rassi views art as her entity

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:05 2017 Friday ,17 February

Singer Diana Karzon will issue a new album soon

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 12:07 2017 Thursday ,16 February

Bite-mimicking malaria vaccine

GMT 09:03 2017 Thursday ,16 February

Tour guide praises women’s beaches

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 21:42 2017 Sunday ,12 February

Rania al-Ghazali designs candles of bubbles
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday