Switzerland takes action to weaken franc
- 10 August 2011
- From the section Business
The Swiss National Bank (SNB) has announced new measures to try to reduce the value of the Swiss franc.
The SNB said it would significantly boost franc supply and would conduct foreign exchange swap transactions, but stopped short of direct intervention.
On Monday, the Swiss government held an emergency meeting and said that "energetic intervention" was needed on the currency.
The increased value of the franc has been hurting Swiss exporters.
The currency has strengthened as investors have been piling into it, viewing it as a haven in times of uncertainty.
The franc soared more than 5% to almost reach parity with the euro on Tuesday.
After the announcement, it fell slightly but later resumed its climb, trading up 0.7% with one euro worth 1.0442 francs.
Against the dollar it was up 0.8%, with the greenback trading at 0.7268 francs.
Jane Foley, senior currency strategist at Rabobank, said it was a brave attempt by the Swiss authorities to weaken the currency but was unsure how effective the move would be.
"The outlook for the euro-Swiss franc lies largely in the hands of the eurozone politicians rather than the Swiss authorities," she said.