Tuesday, 27 January 2015

Swiss franc shock: SNB prepared to intervene in FX market after scrapping euro cap

The Swiss National Bank has revealed that it is prepared to intervene in the foreign exchange market after it stopped capping the Swiss franc's value against the euro on 15 January.
Speaking to domestic press, the SNB's vice chairman also defended the central bank's move to abolish the three-year-old euro cap, as it would have cost 100m Swiss francs (£73m, €97m, $110m) to maintain.
"Giving up the cap means a tightening of monetary policy," said Jean-Pierre Danthine in an interview with Swiss national daily TagesAnzeiger.
"We accept this, but only up to a point. We are fundamentally prepared to intervene in the foreign exchange market."
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