Swiss National Bank reduces interest rate by 50 basis points. | CountingPips Forex Blog

December 11, 2008 - Forex Economic News

Swiss National Bank reduces interest rate by 50 basis points.

The Swiss National Bank announced today its decision to reduce its interest rate by 50 basis points effective immediately. The new 3-month Libor rate target range is 0.00-1.00 percent with the SNB holding the rate in the center of that range for a 0.50 percent interest rate. Swiss Bank cuts interest rate, Forex News, CHF Today's decision follows a surprise rate cut of 100 basis points on November 20th and a 50 basis point reduction on November 6th. The SNB also reduced the rate on October 8th by 50 basis points that was coordinated with other major central banks to ease effects of the credit crisis and falling stock markets.

Accompanying the interest rate decision, the SNB release stated that, "The global economic environment has sharply deteriorated over the past few months. Economic activity has declined in both the US and Europe, and has slowed considerably in Asia. The situation on international financial markets has worsened further since September. The Swiss economy will be heavily affected by these developments."

The SNB statement also said that the expectation is for negative GDP growth in 2009, declining to "between –0.5% and –1%" and that falling oil prices have altered the inflation expectations, allowing the SNB to reduce their interest rate to 0.50 percent. Today's rate reduction was expected by market forecasters and matched expectations of a 50 basis point cut.

tags: switzerland, swiss, interest rate, libor rate, snb, chf

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