Post
Topic
Board Economics
Re: Does SNB see something that we don't know?
by
johnyj
on 31/01/2015, 05:44:25 UTC
I guess they really didn't care about losses to traders.  Smiley

Everything is connected. Wink If they hadn't caused such an earthquake on the currency market, the CHF wouldn't have jumped so much compared to the EUR, which means that SNB's euro holdings would have lost less and the Swiss exporters would have been hurt less.

I still have no idea why they did it that way. These things never happen by accident. They knew very well what was going to happen, yet they chose to do it nevertheless. There was a reason behind it, a reason why it looked like a good idea to them. I just can't figure out what it was.

Maybe they wanted to take out a large hedge fund who has tons of short positions by surprise  Cheesy 

Small country's central bank often become the victim of foreign currency speculators since they are always obliged to buy or sell to keep the rate stable. If there is a difference in official exchange rate and market exchange rate, there will always be arbitraging firms making a lot of profit and the central bank will be the one who pay the bill