The President of Switzerland’s central bank has said that its ultra-loose monetary policy remains ‘absolutely necessary’ after it announced its commitment to keeping interest rates in negative territory on Thursday.

At its quarterly policy update held in the Swiss capital Bern, the Swiss National Bank said that it would continue with its monetary policy expansion as part of continued efforts to tackle low inflation and negative output.

The SNB’s target range for three-month Swiss franc LIBOR was held at -1.25 percent to -0.25 percent, and its sight deposit rate was held at 0.75 percent.

“We still have very low inflation – close to zero – we have a negative output gap and we still have a Swiss franc that is significantly overvalued,” President Thomas Jordan told CNBC shortly after the announcement.

The continued expansionary measures were largely anticipated by analysts, especially given the European Central Bank’s (ECB) decision last week to hold interest rates at 0.0 percent. The SNB is dependent on ECB’s pace of monetary policy and may look at normalizing its policy once President Mario Draghi decides to start rolling back the bank’s asset purchase program.

Though geopolitical risks across Europe have steadied somewhat over recent months after a raft of contentious elections, Jordan said that the bank would continue to intervene in foreign exchange markets where necessary to combat overvaluation of the Swiss franc, which is often seen by investors as something of a safe haven during times of geopolitical risk.

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