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Swiss central bank keeps rates steady, warns of Brexit risk

Switzerland's central bank left its negative interest rates unchanged at record lows, keeping its powder dry should it have to act if Britain votes next week to leave the European Union.

As unanimously expected by economists in a Reuters poll, the Swiss National Bank (SNB) at Thursday's quarterly policy meeting kept its target range for three-month Libor between -1.25 and -0.25 percent. It also maintained a charge on cash deposits of 0.75 percent.

There was little immediate market reaction to the rate decision.

The SNB is using a mixture of negative interest rates and currency purchases in an effort to weaken the "significantly overvalued" franc and ease pressure on Swiss exporters, which are crucial to the country's economy.

The franc is viewed as a safe-haven currency in times of uncertainty and rising anxiety over the implications of a British exit from the EU has pushed the franc higher in recent weeks. On Tuesday, the franc hit a 2016 high of 1.0787 against the euro.

The SNB has said in the past it has option to go more negative with rates.

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Regarding possible risks to the global economy, the SNB said "the imminent U.K. referendum on whether to stay in the European Union may cause uncertainty and turbulence to increase".

Several recent opinion polls have shown the 'Leave' campaign taking the lead in Britain's referendum campaign, despite warnings from Prime Minister David Cameron, the Bank of England and others that Brexit could cause significant economic disruption.

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