GENEVA Switzerland’s central bank moved unexpectedly Wednesday to ease the pressure on the Swiss economy caused by the super-strong franc, which has soared to record highs as debt crises buffet the United States and Europe
GENEVA — Switzerland’s central bank moved unexpectedly Wednesday to ease the pressure on the Swiss economy caused by the super-strong franc, which has soared to record highs as debt crises buffet the United States and Europe.
Declaring their currency “massively overvalued,” the Swiss National Bank cut its key interest rate target, and said it would raise the supply of liquidity to the Swiss franc money market in the next few days in a bid to weaken the franc.
An avalanche of dollars and euros has been tumbling into this Alpine outpost at record rates, as investors see the franc as a haven from the twin debt crises in the United States and Europe. But its resulting strength risks undermining economic growth in Switzerland and stoking inflation, the central bank said.
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“The franc is like the new gold,” said a Geneva banker who would give only his first name, Dmitri, insisting on the discretion that is the hallmark of this reserved nation. “It’s crazy and it’s all anyone is talking about, in the morning, at lunch, at dinner parties.”
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