- Swiss National Bank
The Swiss National Bank slashed deposit rate, sending it to the negative territory, to limit inflows from investors seeking a safe haven place to park their cash. Policy makers in the Alpine nation imposed a charge of 0.25% on sight deposits, the cash-like holdings of commercial banks at the Swiss central bank. The SNB thus expanded the target range for the three-month Libor to -0.75%-0.25% and extended it to its usual width of 1 percentage point. The SNB reiterated its commitment to the minimum exchange rate of 1.20 francs per Euro, underlying that it would defend the cap the "utmost determination" and implement further measures if needed. Given the fact the results of the second round of TLTRO failed to bring relief to the ECB policy makers, further loosening is a matter of time, which may challenge the SNB's task to defend the lid.
Meanwhile, the SNB downgraded its GDP outlook amid the economic slowdown in the Euro zone. Swiss economic output is set to grow 1.8% this year, according to the State Secretariat for Economic Affairs, unchanged from the October projections. In 2015 the country's GDP will rise 2.1%, compared with its earlier expectations of 2.4%. As for consumer price inflation, it is seen to record no growth in 2014, while next year it should grow at a rate of 0.2%, down from the earlier projections of a 0.4% increase.
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