It was a while coming, but the Swiss National Bank has finally done what was needed for it to have a decent chance of halting the franc’s appreciation.
The SNB on Tuesday said it would set a minimum exchange rate of Sfr1.20 to the euro. In order to maintain the peg, it is prepared to buy foreign currency “in unlimited quantities”. Though this could well result in steep paper losses – and so anger its owners, the SNB is right to act.
There are two reasons why. Read more