Switzerland's central bank said Thursday it has seen some reduction in the Swiss franc's "significant overvaluation" but that conditions remain fragile, suggesting the franc's recent weakening isn't enough yet to satisfy Swiss policymakers.
In a policy statement accompanying its decision to keep its key deposit rate at -0.75%, the SNB said the franc has weakened against the euro and strengthened against the U.S. dollar since its last meeting three months ago.
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"Overall, this development is helping to reduce, to some extent, the significant overvaluation of the currency," the SNB said. "The Swiss franc nevertheless remains highly valued, and the situation on the foreign-exchange market is still fragile," it said.
For years, the SNB has repeatedly warned the franc is "significantly overvalued" and in addition to installing negative interest rates the SNB has accumulated hundreds of billions of francs worth of foreign assets as part of its currency interventions to weaken the franc.
"The negative interest rate and the SNB's willingness to intervene in the foreign-exchange market as necessary therefore remain essential in order to reduce the attractiveness of Swiss franc investments and thus ease pressure on the currency," the SNB said Thursday.
Todd Buell contributed to this article.
Write to Brian Blackstone at Brian.Blackstone@wsj.com
(END) Dow Jones Newswires
September 14, 2017 04:10 ET (08:10 GMT)