In their “Monetary policy assessment of 14 March 2013”, the Swiss National Bank (SNB) decided to leave the exchange rate of CHF 1.20 per euro unchanged. The SNB said that “the minimum exchange rate is an important instrument in avoiding an undesirable tightening of monetary conditions. The SNB will therefore enforce this minimum rate with the utmost determination and, if necessary, is prepared to buy foreign currency in unlimited quantities for this purpose.” Last summer the SNB was a key mover of the global forex market. It was known to be buying tens of billions of euros each month, hoping to keep the franc weak to protect its exporters in the face of inflows from spooked overseas investors at the height of the eurozone crisis in May. Rumors abounded among forex investors that the SNB was buying Swedish krona and the Australian dollar. Bankers said there had been days when the SNB was the biggest single buyer of Australian debt. Figures released by the SNB later in the year confirmed the rumors; the proportion of “other” currencies on its balance sheet – the Australian dollar, Swedish krona, Danish krone, Singapore dollar and Korean won – rose. The IMF is considering switching CA…
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