Snb cuts rates to counter soaring swiss franc

The Swiss National Bank announced a shock cut in interest rates and threatened more action to cap a soaring Swiss franc, but the impact was expected to be short-lived given the currency's safe-haven appeal amid mounting concerns about global growth.

The SNB said on Wednesday it would cut its target rate to "as close to zero as possible" from an already rock-bottom 0.25 percent, and said it would very significantly increase the supply of francs to the money market over the next few days.

It said it would not tolerate the effective tightening of monetary conditions imposed by what it called a "massively overvalued" franc which was threatening economic growth and increasing downside risks to price stability.

"The SNB is keeping a close watch on developments on the foreign exchange market and will take further measures against the strength of the Swiss franc if necessary," the bank said.

Source: News.Yahoo.com