"The negative impact of this move on the Swiss economy will be large," Haefele added. "The direct effect on Swiss goods exporters is estimated to be about 5 billion Swiss francs." That's about 0.7 percent shaved off Switzerland's gross domestic product.
Swiss stocks tumbled 10 percent after the announcement, with shares in Swiss watchmakers hit hardest. Richemont and Swatch both tanked over 16 percent in afternoon trade. Financials UBS and Julius Baer plunged 11 percent and Credit Suisse slipped 10 percent.
The Swiss franc also surged over 30 percent against both the euro and the dollar at one point, before rebounding to trade at roughly 1.05 and 0.9 francs respectively.
Nick Hayek, the chief executive of watchmaker Swatch Group, described the central bank's move as a "tsunami" for the export industry and the Swiss economy as a whole.
"Words fail me! Jordan is not only the name of the SNB president, but also of a river… and today's SNB action is a tsunami; for the export industry and for tourism, and finally for the entire country," Hayek said in a statement Thursday.
Luxury analyst at Citi, Thomas Chauvet said historically a strong Swiss franc has been bad news for the likes of Richemont and Swatch Group and the move is likely to negatively impact earnings for both groups.
Citi analysts also said the move "represents a significant setback" for Swiss banks and pharmaceuticals and "high-single-digit downgrades" are likely to follow.
The SNB also cut its benchmark interest rate to 0.75 percent, as it claimed that the overvaluation that warranted the introduction of the minimum exchange rate in the first place back in 2011 has decreased.
The central bank noted that the floor was always meant as a temporary measure to guard against deflationary pressure in Switzerland led by strength in the Swiss franc, that was brought on by safe-haven flows at the peak of the euro debt crisis.
Analysts suggest that the impending European Central Bank meeting on 22 January, where full-blown bond buying program could potentially be announced, had a lot to do with the SNB's timing.
"The SNB cites the likelihood of increased divergence in monetary policy, probably with the ECB vs the Fed in mind, as a reason for the timing of the floor discontinuation," said Morten Thrane Helt, senior analyst at Danske Bank.
"Indeed, the euro dollar de-route ahead of likely ECB easing and Fed hikes later in the year appears to have been the tipping point; thus the SNB implicitly hints that euro dollar should continue to drop from here," he said.