The Swiss National Bank on Thursday decided to retain the currency ceiling at CHF 1.2 per euro and said it stands ready to enforce the franc cap, if necessary, by buying foreign currency in unlimited quantities.
The target range for the three-month Libor was left unchanged at 0.0-0.25 percent. The decision was in line with economists' forecast.
The minimum exchange rate is an important instrument in avoiding an undesirable tightening of monetary conditions, the central bank said.
The bank maintained its view that the Swiss franc remained high. "An appreciation of the Swiss franc would compromise price stability and would have serious consequences for the Swiss economy," it said.
The SNB lowered its forecast for consumer prices this year. The bank now expects prices to fall 0.3 percent in 2013 compared with a 0.2 decline forecast in March. The inflation outlook for both 2014 and 2015 was left unchanged at 0.2 and 0.7 percent respectively.
The bank retained its growth forecast for the economy at 1.0-1.5 percent for 2013.
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