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SNB slaps charge on Swiss franc stockpilers

The growing allure of the franc for international investors has forced the Swiss National Bank (SNB) to introduce negative interest rates as it battles to defend its CHF1.20 exchange rate ceiling with the euro. Falling oil prices, the Russian rouble crash and an anticipated European Central Bank (ECB) spending spree have increased the franc’s appeal as a safe haven currency, putting pressure on the SNB’s policy of containing its appreciation. The franc-euro exchange rate has been hovering in the danger zone of around CHF1.2008 this week, the closest it has come to breaking through the ceiling for several months. The SNB has therefore decided to start charging 0.25% on Swiss franc deposits held at the central bank as of January 22, 2015. From this date, many investors will be charged for the privilege of stockpiling Swiss francs as opposed to earning interest on their deposits as they would expect under more normal circumstances. The charges would hit the central ... Show more

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