Mubasher: Switzerland’s central bank stuck to its ultra-loose monetary policy on Thursday to mitigate pressure on the “highly valued” Swiss franc (CHF), as its peers in the US and Europe suggested dovish stance.

In addition, the central bank introduced a new reference rate “in taking and communicating its monetary policy decisions,” replacing its prior target for three-month Libor, the Swiss National Bank (SNB) said on its website.

The SNB decided to retain an interest rate of -0.75% on balances it holds for commercial banks.

The central bank reiterated its pledge to intervene in the foreign exchange markets, if there is a need to rein in upward pressure on the Swiss currency which hit its highest levels against the euro in two years.

“On a trade-weighted basis, the Swiss franc is somewhat stronger than in March and is still highly valued, [while] the situation on the foreign exchange market continues to be fragile,” the SNB said.

By 8:38 am GMT, the Swiss franc climbed against the euro, as the EUR/CHF pair fell by 0.18% to CHF 1.1218.