A strong franc presents challenges for Swiss export-based companies, as it reduces competitiveness by making their goods more expensive in foreign markets, particularly the eurozone.
The Swiss National Bank's decision reflects the pressures from the watchmaking sector and others, as exports are the backbone of the Swiss economy, especially to the EU.
The central bank acknowledged that strong franc appreciation, coupled with slow global economic growth, would likely result in modest growth within Switzerland's economy.
With the franc's value rising significantly against the euro, Swiss goods may become less attractive to international buyers, leading to potential declines in export volumes.
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