Swiss central bank offers francs for euros
30 October 2008
ZURICH – Switzerland’s central bank said Wednesday that it is pumping Swiss francs into the money markets to meet high demand for the currency. Banks will be able to swap euros for francs on a three-month basis, the Swiss National Bank said.
This comes on top of the weekly swaps already offered by the SNB. The move is an attempt to provide the market with additional liquidity as banks around the world scramble to avoid credit drying up by keeping sufficient funds flowing through the financial system.
The Swiss franc has risen more than 10 percent over the past month compared to the euro because of concern about the strength of the 15 economies that use the common currency.
A sharp drop in so-called "carry trades," where money is borrowed in low interest countries such as Switzerland and invested in high-yield accounts elsewhere, has also contributed to the franc’s rise.
[AP / Expatica]