The Swiss National Bank (SNB) today left its benchmark interest rate unchanged and said it would remain active if necessary in the currency market to weaken the "significantly overvalued" Swiss franc.
Almost a year after the SNB sent markets into a tailspin by ending its franc cap against the euro, it held off from springing another surprise at its quarterly policy assessment.
As expected, Switzerland's central bank kept its target range for three-month Libor at between -1.25 and -0.25%.
It also maintained a 0.75% charge on some cash deposits at the SNB.
European Central Bank policy moves last week that disappointed market expectations for aggressive easing meant the franc has not strengthened against the euro and kept the SNB from having to cut rates further.
"Despite depreciating somewhat in recent months, the Swiss franc is still significantly overvalued," the Swiss central bank said in a statement.
"The negative interest rate and the interest rate differential with other currencies make the Swiss franc less attractive, and continue to help weaken it."
Negative interest rates and currency market interventions have helped the franc stabilise at around 1.08 per euro. This is a tolerable level for exporters to the euro zone, Switzerland's biggest trading partner.
But it is some way off the 1.20 franc per euro ceiling which the SNB unexpectedly scrapped in January and had been in place for just over three years.
