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Switzerland’s central bank imposes negative interest rates

The Swiss National Bank (SNB) announced it is imposing an interest rate of -0.25 per cent on sight deposit account balances.

Switzerland’s central bank confirmed its commitment to the minimum exchange rate of CHF1.20 per euro and added it “will continue to enforce it with the utmost determination”.

Its target range for the three-month Libor has been lowered into negative territory, with the range from -0.75 per cent to 0.25 per cent.

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In a statement, the SNB said: “Over the past few days, a number of factors have prompted increased demand for safe investments. The introduction of negative interest rates makes it less attractive to hold Swiss franc investments, and thereby supports the minimum exchange rate.”

It added: “The SNB is prepared to purchase foreign currency in unlimited quantities and to take further measures, if required.”