Switzerland let fly his frank and causes a storm … – The Obs

Switzerland let fly his frank and causes a storm … – The Obs

Zurich (AFP) – Switzerland has decided on Thursday not to intervene in markets to prevent its currency from appreciating, causing a stock market mini-crash in Zurich and the soaring Swiss franc

<. p> In a terse statement released Thursday morning, the Swiss National Bank (SNB), in charge of monetary policy of the country, announced that the floor conversion rate of the Swiss franc set there 3 years CHF 1.20 for 1 euro, was abandoned and, in addition, the negative rates on large deposits in Swiss francs to discourage speculators were heavy.

This decision was taken aback the financial markets, the surprisingly strong investors in that the SNB was still reiterated in recent days that it would not give the floor rate.

The IMF Managing Director Christine Lagarde herself has expressed Thursday its “surprise “adding that” reserving judgment “on the appropriateness of this measure.

” It was a bit of a surprise, “said the boss of the International Monetary Fund in an interview with the American channel CNBC, calling for more “cooperation” and “communication” between the central banks.

“I reserve judgment on the relevance of this decision because we have not discussed” with the director General of the Swiss National Bank (SNB) Thomas Jordan, Lagarde has said, claiming that he was not informed in advance by the Swiss authorities.

“I hope (the decision) was discussed with other colleagues from central banks but I do not think this was the case, “she also said.

Immediately after the announcement of the SNB, the Swiss franc, now wheel free, went skyrocketing and appreciated by almost 30% compared to the euro or the dollar.

London to 1700 GMT, the Swiss franc traded at 1.0425 franc Swiss per euro and 0.8982 Swiss francs to the dollar. The Swiss currency has even reached around 9:50 GMT 0.7406 Swiss franc against the greenback, its most High level since August 2011

-. Investors “shocked” –

The Exchange Swiss immediately accused the coup and made a huge plunge. Many Swiss companies, publicly traded, are heavily export and the decision of the SNB in ​​difficulty puts them to sell their products abroad.

At the close, the SMI index of the Stock Exchange which includes its 20 Swiss blue chips fell by 8.67% to 8400.61 points after losing to over 12% in session.

The largest decreases are displayed by luxury values such as Swatch (Breguet, Longines, Tissot) and Richemont (Cartier, Van Cleef ….), whose products sell abroad.

These companies have seen their share back respectively 16.35% to 382.30 Swiss francs and

15.50% to 74.95 Swiss francs. Indeed, due to the rise of the Swiss franc, their products have become more expensive by 20 to 30% for foreigners, who may turn away.

“The Swiss National Bank shocked investors, “noted Connor Campbell, an analyst at Spreadex, in a note, noting that the immediate reaction was” explosive “.

” The market clearly had not seen it coming, “said to share Andreas Ruhlmann, an analyst at IG Bank, evoking a “drastic” change in monetary policy.

The average Swiss however welcomed the measure. As this forties who proudly shows off her bank receipt showing that it has received more than 300 euros in exchange for 300 Swiss francs when she rushed into his bank in Geneva to change francs for euros.

“I won 60 Swiss francs in one second,” she told AFP. For those same 300 euros, it would have had to pay 360 Swiss francs the day before.

Others went to line up at exchange offices in Geneva and other Swiss cities to exchange francs against euro

-. Wind panic in Poland –

The process is explained by the fact that many Swiss go shopping every week in French hypermarkets and that they thus save over 20% on their spending Abroad weekly.

Tens of thousands of French border, Italian or German who cross the border each day to work in Switzerland, are the big winners indirect of the operation. In an instant, their monthly income grew 30%. “Provided that the exchange rate hold until the end of the month, when I am paid,” he told AFP a French border working in Geneva.

The measure also had a direct impact abroad, especially in eastern countries, where many individuals have taken out a home loan in Swiss francs to fund the purchase of their house or their apartment in the early 2000s, at a time when it was very advantageous.

So panic blew in Poland where some 700,000 households hold mortgages denominated in Swiss francs, with a zloty winning nearly 20% against the CHF.

“What I can only suffer” admits, philosopher, Roman Kwiatkowski, a psychotherapist in Krakow. “I took this credit because it was much more interesting than loans in zlotys. I knew there was a risk. I can never calculate if eventually I lost or won. My monthly repayment will 1,000 zlotys (230 euros) to 1,200 zlotys (280 euros). Compared to my income, it is not a disaster. “

The craze for loans in Swiss francs contracted most time to buy a home, was particularly strong in Poland and Hungary and Croatia in the early 2000s.