The Swiss central bank kept its key benchmark rates on hold in negative territory as it seeks to curb the franc's appreciation.
The monetary policy committee of Schweizerische Nationalbank decided to maintain its interest rate on sight deposits at negative 0.75% and the target range for the three-month London Interbank Offered Rate at between negative 1.25% and negative 0.25%. The central bank said that it aims to limit the value of the local currency, which has risen slightly overall on the back of the weaker U.S. dollar. It also expressed its willingness to intervene in the volatile foreign exchange market to ease pressure on the currency.
The stronger franc also led the central bank to shift its conditional inflation forecast slightly downward. The central bank's projection for 2018 declined to 0.6% from 0.7% in the previous quarter. For 2019, the inflation forecast is 0.9%, down from 1.1% in the last quarter. The central bank expects inflation to reach 1.9% in 2020.
