The decision came despite repeated assurances from SNB officials in recent months that the central bank was committed to defending the currency cap, which has been credited with protecting Switzerland's export-dependent economy from turmoil in the neighboring eurozone, and limiting the risks of deflation.

Yet the costs and risks associated with keeping the franc from strengthening too much against the euro—which requires the SNB to purchase assets denominated in non-franc currencies, particularly the euro—have become too great. In ditching the cap, the SNB sparked a dramatic rally in the franc, and raised doubts about its own credibility.

Here are five questions about Thursday's move.

Why did the SNB cap the franc's value?

During the eurozone's debt crisis, the Swiss franc, long considered a safe haven in times of stress, appreciated sharply against the euro. That threatened the country's manufacturers, which sell a significant share of their exports to the eurozone. In September 2011, the SNB set a goal of keeping its currency from rising beyond 1.20 francs to the euro.