The Swiss National Bank (SNB) announced that it would significantly increase liquidity via additional repo operations, purchases of Swiss franc bonds of private borrowers, and currency interventions.It cut its interest rate in half to 0.05%..

This follows a series of rate cuts from 2.75% to 0.50% during the fourth quarter of 2008. The latest step effectively means a return to the extremely low official rates that prevailed between March 2003 and June 2004.

The SNB also stated that sharp economic deterioration and the risk of deflation during 2009 to 2011 requires a "strong expansion of liquidity" and announced the use of additional repo operations, purchases of Swiss franc bonds of private borrowers, and foreign-exchange interventions in order to weaken the Swiss franc.

The SNB said that it would purchase Swiss franc-denominated bonds issued by Swiss private-sector borrowers, which could also include bonds from banks and covered bonds.

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