Swiss National Bank's Recent Currency Actions [February 11, 2015]   [open pdf - 59KB]

"In what has been characterized as one of the most significant currency decisions in decades, on January 15, 2015, the Swiss National Bank (SNB) removed without any public warning the cap it had maintained on the foreign exchange value of the Swiss franc relative to the euro. The move surprised international currency traders, who acted swiftly by acquiring francs, sharply increasing the value of the franc against the dollar and the euro […]. Following the announcement, the Swiss stock market dropped by more than 13% and the franc rose by more than 30% against the euro, before settling to a one day appreciation of about 15%. The SNB also set the official interest rate at negative 0.75% to discourage capital inflows and relieve pressure on the franc. By January 16, 2015, the Swiss franc had increased in value from 1.2 francs per euro to par value (one Swiss franc per one euro), but has depreciated slightly since. Similarly, the Swiss franc appreciated against the dollar, and the dollar appreciated against the euro, rising from nearly $1.19 per euro on January 15, 2015, to about $1.13 per euro by the end of the month. In response, the SNB intervened in the foreign exchange markets by spending nearly $65 billion to acquire eurodenominated assets to blunt the appreciation of the franc. According to a triennial survey conducted by the Bank for International Settlements (BIS), the franc is the sixth most heavily traded currency in global foreign exchange markets."

Report Number:
CRS Insight, IN10230
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