THE CENTRAL bank of Switzerland – the Swiss National Bank (SNB) – dropped interest rates to minus 0.25 per cent yesterday.
The SNB has a target to keep the exchange rate at one euro to 1.2 Swiss francs. Reducing interest rates is an attempt to stop the franc rising in value. The franc is viewed as a safe haven by investors, so often increases in value when new uncertainties arise. This can play havoc with supply chains and harm exports.