SNB Unexpectedly Gives Up Cap on Franc, Lowers Deposit Rate - Bloomberg
The Swiss National Bank (SNBN)
scrapped its minimum exchange rate today, abandoning a key tool in its
policy kit designed to shield the economy from the euro area’s sovereign
debt crisis.
In a surprise move, the central bank ended its
three-year-old cap of 1.20 franc per euro and cut the interest rate on
sight deposits over a certain limit. Just a month ago, when the SNB
introduced negative rates, the bank indicated the cap was here to stay,
saying it would defend it with “utmost determination."
The franc
jumped to a record against the euro and rose to its highest in more
than three years against the dollar following today’s announcement. Swiss stocks plunged.
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