SNB Steps Into Currency Market Amid Brexit-Induced Stressby
Swiss policy makers have repeatedly threatened interventions
Franc climbs most since January 2015 in reaction to U.K. vote
The Swiss National Bank waded into currency markets on Friday in reaction to Britain’s referendum on European Union membership that has upended global markets.
“Following the United Kingdom’s vote to leave the European Union, the Swiss franc came under upward pressure,” the central bank said via e-mail. “The Swiss National Bank has intervened in the foreign exchange market to stabilize the situation and will remain active in that market.”
The announcement marks a rare instance of Swiss policy makers publicly making good on their pledge to use interventions to prevent an unwanted tightening of monetary conditions. SNB President Thomas Jordan and his fellow governing board members had reiterated that stance at their post-interest rate decision press conference on June 16 in Bern.
The pound plunged by a record and the euro slid by the most since it was introduced in 1999 as Britain’s “Leave” campaign won the most votes. The Swiss franc, which investors tend to buy at times of market stress, climbed the most since Jan. 15, 2015, when the SNB removed its 1.20 per euro cap. It was trading at 1.08231 at 9:53 a.m. in Zurich.
The SNB last admitted to interventions at the height of the Greek debt crisis in June 2015.