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Swiss National Bank pegs franc to euro
Business digest: Swiss franc fixed at 1.2 exchange rate in radical measure to tackle currency’s soaring value
THE SWISS National Bank (SNB) has fixed its currency against the euro at a rate of 1.2 Swiss francs, after its value rose sharply due its status as a safe haven investment amid the troubled eurozone countries.
The SNB said: "The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development. The Swiss National Bank is therefore aiming for a substantial and sustained weakening of the Swiss franc."
The country pegged its currency to stave off deflation, as the franc approached parity with the euro. The move had an immediate effect, with the euro climbing 9 per cent, the dollar 7.7 per cent and sterling 7.8 per cent just minutes after the announcement.
The high value of the Swiss franc had been hitting the country's exporters, but analysts warned that as Switzerland imports more than it exports from the EU, the move could prove costly.
Read a full report at BBC News. ·
