The Swiss National Bank’s move to break the franc away from its set value against the euro stunned financial markets and has substantial real-world effects.
What the bank essentially did was rescind a 3-year-old agreement it had to keep its money valued at 1.20 per euro, which had been done to promote exchange rate stability even though Switzerland does not use the common currency.
While the move caused tumult in the financial markets, it will be a boon to Swiss consumers. An item priced at 50 euros in Brussels would suddenly cost 51 francs in Davos on Jan. 15 after costing 60 francs on Jan. 14.
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