The SNB has warned it is ready to intervene to mitigate the impact of the franc’s strength on the economy, which is on the brink of its first recession in six years.
The negative interest rate should help the franc to depreciate overtime, where further cut in the rate would depend on the latest international developments, the SNB said.
“Negative interest rates in Switzerland make holding investments in Swiss francs less attractive and will help to weaken the Swiss franc over time,” Chairman Thomas Jordan said at the news conference.
The melting situation in Greece has prompted many investors to resort to the franc as a safe haven.
Hence, If Greece faces default, the franc will probably strengthen further.
Euro area finance ministers will convene in Luxembourg on Thursday in the latest attempt to help Greece reach an accord with its creditors after the break in talks the previous couple of days.
The EURCHF is currently trading near the session’s opening around 1.0450 after hitting a high of 1.0469.
Against the U.S. dollar, the franc strengthened for a second straight session on drop in the green currency following comments from Fed Chair Yellen last night.
The USDCHF is meanwhile trading 0.9161 after setting a low at 0.9153.