The Swiss National Bank (SNB) introduced a minimum exchange rate, pegging the Swiss franc (CHF) at 1.20 per euro in 2011. However, on 15 January 2015, the SNB unexpectedly announced it would discontinue the minimum exchange rate policy. Given the figure showing the CHF/EUR rate:Which of the following statements is NOT correct?Single choice

Question Image
A

a. The value of CHF increased right after the announcement on 15 Jan 2015

B

b. In 2013-2014, to prevent the CHF/EUR decrease below 1.20, the SNB could purchase EUR in the currency market when the CHF/EUR gets close to 1.20

C

c. The Purchasing Power Parity implied exchange rate (real exchange rate) deviates from the spot rate after the announcement

D

d. If the interventions were done as a non-sterilized intervention during 2011-2015, the Swiss government may have a long-term inflation threat

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