Investing.com - The Swiss National Bank left its benchmark interest rate unchanged at record-low levels and reiterated that it is still prepared to take further action to weaken the franc, it announced on Thursday.
In a statement, the SNB said it was keeping its benchmark interest rate unchanged at -0.75%, in line with expectations. The central bank also left the target range for the three-month Libor unchanged at between -1.25% and -0.25%.
The accompanying rate statement released after the announcement said that "the Swiss franc is still significantly overvalued."
The SNB added that it will "remain active in the foreign exchange market, as necessary."
The new conditional inflation forecast has been revised slightly downwards compared to the June forecast. For 2016, the inflation forecast remains unchanged at –0.4%. For 2017, the SNB expects inflation of 0.2%, compared to 0.3% forecast in the last quarter, while for 2018, the forecast has fallen from 0.9% to 0.6%.
In the second quarter, the Swiss economy posted growth of 2.5% on an annualized basis. Overall, the revised quarterly estimates for GDP suggest a somewhat stronger recovery of the Swiss economy since the middle of last year. Nonetheless, on the whole, capacity utilization remains unsatisfactory. Moreover, not all industries have benefited equally from the recovery. As a result, margins at a large number of companies continue to be strained.
The SNB is anticipating a continuation of the recovery. In the second half of the year, however, growth is likely to be more modest than in the first half, partly owing to a temporary weakening of growth in Europe. For 2016 as a whole, the SNB now expects growth of approximately 1.5%.
EUR/CHF was trading at 1.0952 from around 1.0958 ahead of the decision, while USD/CHF was at 0.9759 from 0.9761 earlier.