The Swiss National Bank has staggered global markets with the shock announcement that it has abandoned its peg to the euro.
The bank’s decision to end the exchange rate control, which placed a maximum value on the Swiss franc of 83 euro cents since 2011, saw the franc soar by 30 percent against the euro.
Bank chairman Thomas Jordan made the announcement:“When deciding on monetary policy, the Swiss National Bank will in the future take notice of the exchange rate situation. And be active in the foreign exchange market if necessary, in order to influence monetary conditions.
At its lowest on a chaotic trading day the Swiss Franc hit 0.86 euro cents, but has since gone above parity with the euro.
Christian Levret is a Swiss deputy: “ Well I am very surprised, very surprised, surprised at the abandonment and the timing and surprised the Swiss National Bank has taken a risk with our economy. If the franc and the euro stabilise at parity then Swiss jobs in the export industry are at risk.”
At one point the Swiss franc hit €1.20 before falling to €1.05.
Swiss shares lost some 6 percent and the markets across Europe fell as investors reacted to the news by buying into “safe haven” assets such as gold.