The Swiss National Bank's move to cap how much further its currency, the franc, can strengthen was a huge mistake, says international investor Jim Rogers.
The franc has been surging in value, but the Swiss National Bank (SNB) pegged the currency to the euro to halt its strengthening trend.
The cap "will work for a while, but the market will have more money in the end than the SNB," Rogers, co-founder of the Quantum Fund with George Soros, tells CNBC.com.
(Getty Images photo)
The Swiss central bank could lose large sums of money buying currencies to maintain the exchange rate, which could prove to be costly.
Furthermore, weakening the franc could hurt the Swiss financial industry, Rogers adds.
"So this is a huge mistake for Switzerland since they are going to suffer more either way," Rogers says.
Exporters, which include cheese makers, knife makers and ski makers, have applauded the move to peg the currency 1.20 per euro, which makes their products more competitive abroad.
"If we have an exchange rate at 1.20 and this is more or less stable, then we have something we can count on," says Peter Hug, chief executive officer of Wenger, a maker of Swiss army knives, according to Bloomberg.
"Of course, 1.30 is better. Being realistic, I can say this is a good step in the right direction."
"I am so happy," says Benedikt Germanier, chief executive officer of Zai, a maker of luxury skis based in Disentis, Switzerland, Bloomberg adds.
"It reduces the currency risk you don't need during times like this."
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