* SNB leaves interest rates unchanged at record lows
* Economists had expected unchanged SNB policy in poll
* Policy aims to rein in “significantly overvalued” franc (Recasts with comments from news conference)
By John Revill and Silke Koltrowitz
BERN, Dec 15 (Reuters) - The Swiss National Bank kept its interest rates at record lows on Thursday, citing increased global uncertainty in the wake of the U.S. presidential election and upcoming votes across Europe.
SNB Chairman Thomas Jordan said he was cheered by the U.S. Federal Reserve’s interest rate hike on Wednesday, which he hoped would signal the start of more conventional monetary policy and an upswing in the global economy.
But “considerable risks” remained, Jordan said, making the SNB stick to its twin policy of negative interest rates and currency market interventions to stem upward pressure on the “significantly overvalued” Swiss franc.
Jordan declined to rule out further rate cuts, saying the central bank would closely follow the impact of Donald Trump’s election, the implementation of Britain’s vote to leave the European Union, and elections in Europe next year.
“We will have to analyse precisely which economic policy the U.S. will adopt, and our focus will be on two aspects: which impulses will the fiscal policy give and what effects will trade policy have on the free international market,” he said.
Trump has fueled concerns by pledging to renegotiate accords such as the North American Free Trade Agreement (NAFTA) and impose tariffs on imports from countries such as China.
As expected, the SNB kept its target band for three-month Libor unchanged at -0.25 to -1.25 percent and the interest rate it charges on sight deposits at -0.75 percent.
Negative rates and currency interventions aim to weaken the franc by making it less attractive to investors.
The bank changed the wording of the its currency intervention strategy, saying it was now taking the overall currency situation into consideration.
“This is a strong indication that larger flexibility in franc movement will be accepted, meaning, less intervention by the SNB,” said Peter Rosenstreich at Swissquote Bank.
Jordan played down the significance. “It was always clear we would not look not only at one currency but we would look at all currencies,” he said. “That doesn’t mean we are less active, less focused on the currency situation.”
Jordan said the Fed’s decision to lift its benchmark rate was the “first positive sign” that the world was moving towards more conventional monetary policy.
But he cautioned that it was too early to speak of a turning point for interest rates across all currencies “because developments in different economic zones differ a lot”. (Reporting by John Revill and Silke Koltrowitz, additional reporting by Angelika Gruber; Editing by Michael Shields and Tom Heneghan)