By Jonathan Davies
Switzerland's National Bank (SNB) has introduced interest rates of -0.25% to lower the value of the Swiss franc.
The move will cut the value of any deposits left in the country. The negative rates will only apply to deposits of 10 million Swiss francs or more.
SNB said in a statement: "Over the past few days a number of factors have prompted increased demand for safe investments.
"The introduction of negative interest rates makes it less attractive to hold Swiss franc investments, and thereby supports the minimum exchange rate."
The huge crash in the price of the Russian rouble and oil prices has led to investors looking to 'safe havens', like Switzerland.
The SNB tries to keep the value of the Swiss franc under €1.20.
Andy Scott from foreign exchange specialists HiFX, said: “Having seen the franc trading at, or very close to, the cap that it set of 1.20 to the euro over the past month, the SNB obviously felt it needed to shore up its defences against a building storm surge of money looking for a safe home.
"It is also faced with the potential for Q.E. by the ECB next year, which would likely put further downwards pressure on the euro across the board. Finally, Switzerland continues to face the risk of deflation as highlighted by the SNB at their last meeting, with the strength of the franc a key contributor to annual CPI running at just -0.1% in November."
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