The Swiss National Bank said it is introducing the SNB policy rate, replacing the three-month Libor, saying the future of the Libor is not guaranteed.
In the monetary policy assessment on Thursday, the SNB said it is maintaining the expansionary monetary policy as before.
Interest on sight deposits held by banks at the SNB currently corresponds to the SNB policy rate and remains at ?0.75 percent. The interest on sight deposits was unchanged at -0.75 percent.
The central bank aims to keep Swiss franc money market rates close to the SNB policy rate.
The SNB said the Swiss franc is still highly valued.
The bank said the negative interest rate and the willingness to intervene in the foreign exchange market as necessary remain essential in order to keep the attractiveness of Swiss franc investments low and thus ease pressure on the currency.
Further, the bank raised its inflation forecast for 2019 to 0.6 percent from 0.3 percent. The projection for 2020 was raised to 0.7 percent from 0.6 percent.
The central bank continues to expect the economy to grow by around 1.5 percent in 2019.
The Swiss big banks Credit Suisse and UBS have slightly improved their capital situation, despite moderate deterioration in economic and financial conditions, the Financial Stability Report said.
The FSR noted that imbalances in mortgage and residential real estate markets pose risks to financial stability. The SNB assessed that targeted measures are necessary for residential investment property lending.
The material has been provided by InstaForex Company – www.instaforex.com