In September 2011 the Swiss central bank decided to cap (or peg) the value of the Swiss franc against the euro at 1.20 francs to the euro. In January 2015 the Swiss central bank announced that they were ceasing to peg the franc against the euro; the exchange rate would revert to floating. 

(i) Why did the Swiss central bank peg to the euro in September 2011? Explain. 

(ii) Why did Swiss central bank subsequently 'unpeg' from the Euro? Do you think they did the right thing in 'unpegging'? Explain and discuss

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Swiss Franc Peg to Euro Why it Happened and Why it Ended i Reasons for Pegging in 2011 The Swiss National Bank SNB implemented the franc peg against t... View the full answer