After pegging the Swiss franc at 1.2 per euro for a period of about three years, the Swiss National Bank suddenly revalued the franc sharply higher in January 2015, in a surprise contractionary move. They also cut interest rates sharply, a near perfect (and very rare) example of NeoFisherism in action. In the months leading up to the revaluation, the SNB had accumulated significant foreign reserves, as it sold francs to speculators who (correctly) anticipated that the Swiss would revalue. The SNB was worried about the risk associated with an excessively large balance sheet. What if all those euro and dollar assets fell in value? Might the SNB become insolvent? At the time I warned the Swiss that they
Scott Sumner considers the following as important: International Macroeconomics: Exchange Rates, International Debt, etc.
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