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SNB Unexpectedly Cuts Rate to Curb ‘Overvalued’ Swiss Franc

The Swiss central bank unexpectedly cut interest rates and said it will increase the supply of francs to money markets to curb the “massively overvalued” currency. The franc dropped from a record.

The Swiss National Bank lowered its target for the three-month Libor to “as close to zero as possible” from 0.25 percent. The Zurich-based central bank said it will also expand banks’ sight deposits, or cash which can be withdrawn on demand, to 80 billion Swiss francs ($104 billion) from 30 billion francs and repurchase outstanding SNB Bills, according to an e-mailed statement today.