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(Bloomberg) -- The Swiss National Bank unexpectedly gave up its minimum exchange rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign debt crisis.

In a surprise move, the central bank lowered the interest rate on sight deposit account balances that exceed a given exemption threshold by to minus 0.75 percent from minus 0.25 percent, it said in a statement today.

“While the Swiss franc is still high, the overvaluation has decreased as a whole since the introduction of the minimum exchange rate,” the institution said. “The economy was able to take advantage of this phase to adjust to the new situation.”

It also moved the target range for the three-month Libor to between minus 1.25 percent and minus 0.25 percent, from the current range of between minus 0.75 percent and 0.25 percent.

SNB President Thomas Jordan will hold a briefing at 1:15 p.m. in Zurich today.

--With assistance from Jan-Henrik Förster in Zurich and Joel Rinneby in Stockholm.

To contact the reporter on this story: Catherine Bosley in Zurich at cbosley1@bloomberg.net To contact the editors responsible for this story: Fergal O’Brien at fobrien@bloomberg.net Zoe Schneeweiss