SWISS-SNB/BANKS-REACTIONS People rush to currency exchange offices in Geneva after unexpected scrapping of the cap against the euro

Record ID: 565741

  • Title: SWISS-SNB/BANKS-REACTIONS People rush to currency exchange offices in Geneva after unexpected scrapping of the cap against the euro
  • Date: 15th January 2015
  • Summary: BERN, SWITZERLAND (FILE) (REUTERS) GENERAL VIEW OF BERN SIGN READING: "SWISS NATIONAL BANK" AT SNB HEADQUARTERS IN BERN SNB HEADQUARTERS IN BERN, GENERAL VIEW
  • Embargoed: 30th January 2015 12:00
  • Keywords:
  • Location: Switzerland
  • Country: Switzerland
  • Topics: General
  • Reuters ID: LVA10ZV5QCI2F2EUEVD7LXLUKZO7
  • Story Text: After the Swiss National Bank shocked financial markets on Thursday (January 15) by scrapping a three-year-old cap on the franc, sending the safe-haven currency soaring against the euro and stocks plunging amid fears for the export-reliant Swiss economy, people rushed to currency exchange offices in order to exchange their Swiss francs for euros.
    Many people did not bother with small change, exchanging larger amounts.
    Only days ago, SNB officials had described the 1.20 francs per euro cap, introduced in 2011 at the height of the euro zone crisis to prevent the strong currency leading to deflation and a recession, as the cornerstone of the bank's monetary policy.
    The U-turn sent the franc nearly 30 percent higher against the euro in chaotic early trading. It came a week before the European Central Bank is expected to unveil a massive bond-buying programme that might have forced the SNB to intervene repeatedly to defend the cap.
    As it removed the upper limit on the currency, the SNB sought to discourage new flows into Swiss francs by pushing down its interest rate on some cash deposits held at the central bank by commercial banks and other financial institutions.
    After taking the rate into negative territory last month for the first time since the 1970s, it cut another 0.5 percentage points on Thursday to -0.75 percent, a move Jordan said would help ease upward pressure on the franc over time.
  • Copyright Holder: FILE REUTERS (CAN SELL)
  • Copyright Notice: (c) Copyright Thomson Reuters 2015. Open For Restrictions - http://about.reuters.com/fulllegal.asp
  • Usage Terms/Restrictions: None
Register