Swiss National Bank leaves interest rates unchanged

The Swiss National Bank has left interest rates unchanged in the wake of the European Central Bank's announcement that its key rate is rising by 25 basis points to 3.75 per cent.

The Swiss National Bank has left interest rates unchanged in the wake of the European Central Bank’s announcement that its key rate is rising by 25 basis points to 3.75 per cent.

The SNB’s target range for LIBOR (London Interbank Offered Rate) remains 2.5 to 3.5 per cent.

Neither decision came as any surprise. The SNB tightened its monetary policy last month in a show of independence from the ECB. The LIBOR rate rose 75 basis points.

But the franc lost further ground against the US dollar after the latest news, with the US currency briefly trading above the SFr 1.7150 mark before falling back slightly. The dollar has been trading at ten-year highs against the franc which is falling in line with the single European currency, the euro.

Most experts expect the ECB move to do little to support the euro which reached record lows against the dollar earlier this week. Since its launch 16 months ago, it has lost around 20 per cent of its value against the dollar.

Analysts say the strong performance of the US economy, as well as doubts about the willingness of EU countries to carry out structural reforms to their economies, are undermining the euro.

by Michael Hollingdale