Swiss National Bank decided to keep the 3-month libor target rate at record low of 0.00 to 0.25 percent in June, in an attempt to support the economy and limit the downside risks of stronger Swiss Franc.
The SNB also maintained the franc ceiling at 1.20 franc per euro, pledging to keep defending franc ceiling, as the SNB confirms buying unlimited foreign currency to defend the price limit threatening the country`s exports from becoming too expensive in world markets.
The Swiss economy grew 0.6 percent rate in the first three months of the 2012 and recorded 3.2 percent growth on the annual basis. The fragile exports growth continues to weigh on national output.
Switzerland is also threatened by risks of low rates of inflation that pushed the country into deflation. In May, inflation recorded -0.5 percent, and -0.6 on the yearly basis, providing further justification for the bank hold on policy.
As for inflation, the central bank is expecting inflation rate of -0.3 percent for 2013, compared with -0.2 percent forecasted three months ago. The SNB sees inflation at 0.2 percent in 2014 and 0.7 percent in 2015.
The SNB maintained its March forecast for growth the SNB expects economy to grow 1.0 percent to 1.5 percent in 2013.
The euro rose against its Swiss counterpart following the decision, as of 10:35 GMT 2 the EUR/CHF hit a session high of 1.2348 and a low of 1.2339. The pair was holding around 1.2309 compared with the day`s opening of 1.2339.