ZURICH (Reuters) – The Swiss franc weakened nearly 0.3 percent to 1.162 against the euro after voters in Switzerland rejected plan to transform Switzerland’s financial landscape by barring commercial banks from electronically creating money when they lend.
The Sovereign Money initiative was rejected by more than three quarters of voters in a referendum on Sunday.
The Swiss National Bank had opposed the initiative, which would have made it the only authority allowed to create new money in Switzerland, saying it would limit its ability to conduct monetary policy.
Analysts had argued an acceptance of the initiative could have triggered renewed upward pressure on the franc as speculators bet against the SNB’s weakened ability to intervene in the currency markets.
The SNB acknowledged the result, saying adoption of the initiative would have made it much harder to control inflation in Switzerland.
“With conditions now remaining unchanged, the SNB will be able to maintain its monetary policy focus on ensuring price stability, which makes an important contribution to our country’s prosperity,” it said in a statement on Sunday.
At 0550 GMT, the franc was trading at 1.1621 to the euro.