SNB hold Libor Range steady
11 December 2009
The Swiss National Bank started the long route back to normalising monetary policy, slightly softening its pledge to fight a rise of the Swiss franc even as it held interest rates steady.
"Expansionary monetary policy cannot be maintained for the next three years because price stability will be compromised in the long term," SNB Chairman Jean-Pierre Roth said. "However, a swift correction in monetary policy would be precipatate since the inflation outlook is still associated with downside risks," Roth said.
Roth said while the financial industry was gradually recovering, another deterioration could not be entirely ruled out and a risk of identification remains. The central bank renewed its pledge to fight any rise in the franc against the euro, but tweaked its language slightly to indicate it would prevent only an "excessive" rise.