FRANKFURT (MNI) – Following is the text of the monetary policy
decision released Thursday by the Swiss National Bank:

“The Swiss National Bank will enforce the minimum exchange rate of
CHF 1.20 per euro set on 6 September with the utmost determination. It
is prepared to buy foreign currency in unlimited quantities.

It continues to aim for a three-month Libor at zero and will
maintain total sight deposits at the SNB at significantly above CHF 200
billion. With these measures, the SNB is taking a stand against the
acute threat to the Swiss economy and the risk of deflationary
development that spring from massive overvaluation of the Swiss franc.

Even at a rate of CHF 1.20, the Swiss franc is still high and
should continue to weaken over time. If the economic outlook and
deflation risks so require, the SNB will take further measures.

The growth of the global economy has slowed substantially in the
course of the second quarter. The outlook for the advanced economies, in
particular, has worsened considerably. In Switzerland, economic activity
is suffering from both the strong Swiss franc and the softening in
international demand.

The SNB expects growth to come to a halt in the second half of the
year. For 2011 as a whole, GDP growth can be expected at 1.5-2.0%. This
is only because of the favourable economic development in the first half
of the year. Without the stabilising effect of the minimum exchange
rate, there would be a substantial threat of recession.

Uncertainty about the future outlook for the global economy remains
exceptionally high and the risks for the global financial system have
increased substantially. The deterioration in the outlook for growth and
fiscal problems in the advanced economies are both adversely impacting
confidence in financial markets worldwide.

The SNB’s conditional inflation forecast has shifted substantially
downwards as a result of the massive appreciation in the Swiss franc and
the deterioration in the outlook for the global economy.

For 2011, the forecast shows an inflation rate of 0.4%, for 2012 a
rate of -0.3% and for 2013 a rate of 0.5%. This forecast is based on the
assumption of a three-month Libor of 0.0% and a further weakening in the
Swiss franc.

In the foreseeable future, there is no risk of inflation in
Switzerland. There are, however, downside risks for price stability
should the Swiss franc not weaken further.”

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