(Bloomberg) -- The Swiss National Bank kept interest rates unchanged, conserving ammunition ahead of a British vote on European Union membership that has the potential to complicate monetary policy-making the world over.

The SNB, whose currency is sought by investors at times of crisis, held its deposit rate at minus 0.75 percent on Thursday, as forecast by economists in a Bloomberg survey. Saying the franc remained significantly overvalued, it also reiterated its threat to wage currency-market interventions if needed.

The franc has appreciated more than 2 percent since the start of the month and hit a 2016 high against the euro on Tuesday as market anxiety mounts about the likelihood of the U.K. leaving the EU, with polls this week giving “Leave” the lead ahead of the June 23 vote. SNB President Thomas Jordan, who along with his fellow governing board members Fritz Zurbruegg and Andrea Maechler will hold a press conference at 10 a.m. in Bern, already noted weeks ago that a Brexit would cause “enormous stress” in Europe. The Bank of England will announce its policy decision three hours later.

“It’s a case of the London blues -- we’ve seen it in the markets all week, the referendum is casting its shadow as it draws closer,” said Alexander Koch, an economist at Raiffeisen Schweiz in Zurich. “D-Day is only next Thursday.”

Central bankers from Frankfurt to Tokyo are casting a nervous eye toward Britain, on the grounds that a break from the free-trade bloc would cause financial market turbulence and stymie already feeble global growth.

Federal Reserve Chair Janet Yellen said Wednesday that a so-called Brexit “is a decision that could have consequences for economic and financial conditions,” and “was one of the factors” officials considered when they decided to keep interest rates unchanged. The Bank of Japan on Thursday also refrained from altering its policy stance ahead of the U.K. vote.

For Switzerland, a British exit could mean a further rise in the franc against major currencies. That might choke off exports that have just begun to show signs of recovery after the SNB decided last year to give up its currency cap, causing a sharp appreciation of the franc. Should interventions be needed immediately, the SNB could make use of its trading desk in Singapore as results pour in early on June 24.

Intervention Response

Interventions will probably be the SNB’s first line of defense to reign in any currency strengthening, according to Bloomberg’s most recent survey of economists, with some also expecting a cut to the deposit rate, already at a record low.

“Were there to be fresh inflows into Switzerland, what’s left for them to do?” Simon Derrick, chief markets strategist at Bank of New York Mellon Corp. in London told Bloomberg Television’s Francine Lacqua and Tom Keene in an interview on June 15. “Can they really get any more negative than this?”

Yes, according to economists who say the SNB could take its deposit rate as low as minus 1.25 percent before investors begin to hoard cash in a bid to circumvent the charge.

On Thursday, the SNB also left its target range for three-month Libor unchanged at between minus 0.25 percent and minus 1.25 percent, as expected by economists.

Jordan last admitted to currency purchases at the height of the Greek debt crisis a year ago. The SNB has some 600 billion francs ($626 billion) of foreign-currency reserves, a sum almost equal to the economy’s annual output. Growth slowed to 0.9 percent last year due to the strong franc.

The State Secretariat of Economics earlier on Thursday issued updated forecasts for economic expansions of 1.4 percent this year and 1.8 percent in 2017. It sees the inflation rate at minus 0.4 percent in 2016 and at 0.3 percent next year.

“If EU stability is affected by the U.K.’s leaving or the European market is damaged, it is to be expected that Swiss exports and therefore the Swiss economy experience lower growth,” UBS economist Alessandro Bee said in a note to clients published on June 7.

--With assistance from Jana Randow Jan Schwalbe Brian Swint Jeffrey Vögeli Mara Bernath Jan-Henrik Förster Paul Verschuur and Corinne Gretler To contact the reporters on this story: Catherine Bosley in Zurich at, Alice Baghdjian in Zurich at To contact the editors responsible for this story: Fergal O'Brien at, Zoe Schneeweiss, Jana Randow

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