The Swiss National Bank
(SNB) is responsible for monetary policy decisions in Switzerland and, as such, dictates the country’s interest rate, known as the SNB policy rate. Reductions in the SNB policy rate typically coincide with gains in the EUR/CHF exchange rate as the Swiss Franc weakens – the opposite holds true as well. The pair is important to the SNB because the bank pegged the CHF to the EUR at 1.2 CHF per EUR until January 15, 2015. Upon removal, the currency values changed dramatically leading to considerable volatility in foreign exchange markets.