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The Swiss franc has risen by 30% in chaotic trade after the central bank abandoned the cap on the currency’s value against the euro.

The Swiss National Bank (SNB) said the cap, introduced in September 2011, was no longer justified.

It also cut a key interest rate from -0.25% to -0.75%, raising the amount investors pay to hold Swiss deposits.

The IMF’s head, Christine Lagarde, called the move “a bit of a surprise”.

Christine Lagarde said she was also surprised that the governor of the Swiss National Bank had not contacted her, and said she hoped he had communicated the plan to his fellow central bank governors.Swiss franc soars

Following the SNB move the euro went from buying 1.20 francs to buying just 0.8052, but it later recovered to buy 1.04.

Swiss shares closed down 9% and stock markets around Europe fell with investors buying “safe haven” assets such as gold and German bonds.

Many investors believe that with the franc so strong Swiss companies will struggle to maintain export levels.

Watchmaker Swatch saw its share price slump 15%. Swatch chief executive Nick Hayek called the decision “a tsunami” for Switzerland’s economy.

Mark Haefele, chief investment officer of Swiss bank UBS, estimated that the move would cost Swiss exporters close to 5 billion Swiss francs, equivalent to 0.7% of Swiss economic output.

One trader described trading after the unexpected announcement as “carnage”.

While the Swiss franc was held at 1.20 to the euro it had tracked the euro’s fall against the dollar.

Many believe the euro will fall even further if the European Central Bank (ECB) starts quantitative easing, buying bonds to push cash into the eurozone banking system to stimulate a recovery.

Keeping the franc at 1.20 to the euro had became increasingly expensive for the SNB as it sold its own currency and bought up euros, sterling, US and Canadian dollars and yen, usually in the form of government bonds.

SNB foreign currency reserves have more than doubled since the cap was started in 2011 making it one of the five largest holders of foreign reserves in the world.

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Voters in Switzerland are heading to polls to vote on “The Swiss Gold Initiative” in a national referendum.

On the ballot is a measure to prohibit the Swiss National Bank (SNB) from further gold sales, to repatriate Swiss-owned gold to Switzerland, and to mandate that gold make up at least 20% of the SNB’s assets.

According to analysts, the Swiss referendum is driven by an undercurrent of dissatisfaction with the conduct not only of Swiss monetary policy, but also of Swiss banking policy.

Gold prices took a dive on November 28 as the market geared up for what could be the metal’s own OPEC moment – when Switzerland will vote on whether its central bank should hold more gold and bring back its other gold reserves held in places like Canada and the U.K.

The result of the Swiss vote is expected at 1PM local time on November 30 (7AM Eastern Time). Latest polls show support is fading for that “Save our Swiss Gold” campaign. If the “Yes” camp wins, gold will see an initial jump in prices.

Under such a vote, the SNB would need to accumulate 1,500 tons of gold over five years.

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Swiss National Bank has announced a loan it granted to bail out troubled bank UBS in 2008 has been repaid.

The development means UBS can now buy back the once-toxic assets taken out of the bank at the height of the financial crisis.

The assets, worth $38.7 billion at the time of the bailout, have since become profitable.

UBS, Switzerland’s biggest bank, has already said it plans to buy them back.

It described the buy-back as an “important step which will close this chapter in the firm’s history with a positive outcome”.

Swiss National Bank has announced a loan it granted to bail out troubled bank UBS in 2008 has been repaid

Swiss National Bank has announced a loan it granted to bail out troubled bank UBS in 2008 has been repaid

It would mark a significant milestone in the recovery of the bank, and Switzerland’s wider banking sector, following the banking crisis during which UBS came close to collapse.

In later 2008, the Swiss National Bank (SNB) was forced to set up a stabilization fund into which illiquid assets could be transferred.

The SNB said the price UBS will pay for the assets will be determined by a valuation from independent agents.

The fund’s equity amounted to $5.5 billion at the end of 2012.

Banks in Europe and the US are still recovering from the financial crisis, with bailout money still to be repaid and many governments still heavily invested in their banking sectors.

The European Central Bank said on Friday that banks would return a further 654 million euros in crisis loans issued in 2011 and 2012.

More than 1trillion euros was lent out by the bank, and more than a quarter has so far been repaid.