The Swiss National Bank announced on Thursday it aimed to weaken the Swiss franc to fight the risk of deflation as the country faces the worst recession in 30 years. The intervention has shocked investors around the globe and raised talk of a “currency war”.
As a result, the Swiss Franc saw its biggest ever one-day drop against the Euro after the Swiss National Bank began selling francs and cut the interest rate in an attempt to fight the growing risk of deflation.
The Swiss franc is one of the world’s most traded currencies, at times prized as a safe haven for investors. The country’s intervention raises fear around the globe of a currency war with nations acting independently to protect their own interest underminind their currencies.
Image by byebyeempire under Creative Commons.
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