The Swiss franc soared as much as 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 International Monetary Fund's head, Christine Lagarde, called the move "a bit of a surprise".
She 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.
Is the bottom really in? Could there be a final capitulation just ahead of us? Have you plenty of cash to take advantage of the coming bargain prices?
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