The Swiss National Bank has intervened in Europe's debt crisis, announcing it will set a minimum exchange rate for the Swiss franc against the euro.
"With immediate effect, it will no longer tolerate a EUR/CHF exchange rate below the minimum rate of CHF 1.20," the SNB said in a take-no-prisoners statement Tuesday.
"The SNB will enforce this minimum rate with the utmost determination and is prepared to buy foreign currency in unlimited quantities," the bank said.
The news comes after investors, fearful of the debt crisis in the European Union, began selling the euro and buying the Swiss franc.
Swiss authorities have been afraid that if the franc gets too strong, it could hurt their economy by making their products too expensive on the international markets.
"It needs to be aggressive to turn the tide for the Swissie and to take the shine off its safe haven status," CNBC quoted Paul Mackel, senior FX strategist and head of Asian currency research at HSBC.
"So, this is an endurance contest whereby the SNB needs to fight hard against a market that could soon test its resolve," he said.
Investors have also been buying gold to protect themselves from a debt crisis. The yellow metal has once again climbed above $1,900 an ounce.