SNB removes EUR/CHF floor, sets deposit rate at -0.75%

FXStreet (Córdoba) - Swiss National Bank surprised markets on Thursday by announcing it will remove the 1.20 EUR/CHF floor and it is also lowering the rate on sight deposit by 50 bps to -0.75%.

“Recently, divergences between the monetary policies of the major currency areas have increased significantly – a trend that is likely to become even more pronounced. The euro has
depreciated considerably against the US dollar and this, in turn, has caused the Swiss franc to weaken against the US dollar. In these circumstances, the SNB concluded that enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer
justified”, said the SNB in a statement.

The SNB said the decision to lower interest rates significantly is to ensure that the discontinuation of the EUR/CHF floor does not lead to an inappropriate tightening of monetary conditions.