Swiss Franc Introduction

The Swiss franc is the legal tender of Switzerland and Liechtenstein and is issued by the Swiss National Bank. It is one of the most powerful currencies in the world and one of the most beautiful.

History of the Swiss Franc

The predecessor of the Swiss franc was the Swiss Federal Franc, which was issued in 1850 and replaced various local currencies previously circulated in Switzerland. At that time, the Swiss federal franc was equivalent to the currencies of members of the Latin Monetary Union such as the French franc and the Belgian franc, with 1 franc = 100 centimes.

In 1891, the Swiss National Bank was established and began to issue banknotes.

In 1914, with the outbreak of World War I and the dissolution of the Latin Monetary Union, the Swiss Federal Franc was decoupled from the currencies of other members and began to float freely.

In 1936, in response to the economic crisis and deflation, the Swiss National Bank pegged the Swiss federal franc to the pound sterling, with 1 pound = 25.35 francs.

In 1945, at the end of World War II, the Swiss National Bank pegged the Swiss Federal Franc to the U.S. dollar, with 1 U.S. dollar = 4.30521 francs, and joined the Bretton Woods system.

In 1971, the Bretton Woods system collapsed and the U.S. dollar was decoupled from gold. The Swiss National Bank also abandoned the fixed exchange rate system and allowed the Swiss Federal Franc to float freely.

In 1973, in order to simplify the name and symbol of the currency, the Swiss National Bank changed the name of the Swiss Federal Franc to the Swiss Franc and adopted the ISO code CHF.

In 1999, when the euro was born, some European countries gave up their national currencies and joined the euro zone. Switzerland and Liechtenstein are not part of the eurozone, but their currencies are influenced by the euro due to their location and economic ties.

In 2011, the European debt crisis caused the euro to depreciate, while safe-haven demand pushed up the Swiss franc's exchange rate. In order to prevent excessive appreciation from damaging exports and growth, the Swiss National Bank announced the implementation of a minimum exchange rate policy and set the exchange rate of the euro against the Swiss franc at 1.2.

On January 15, 2015, as the European Central Bank was about to launch a quantitative easing policy that might further weaken the value of the euro, the Swiss National Bank suddenly gave up its minimum exchange rate policy and lowered interest rates to -0.75%. This decision triggered market shock and panic, causing the euro to plunge nearly 30% against the Swiss franc in one day, hitting a record low. Since then, the Swiss National Bank has taken a variety of measures to stabilize the exchange rate and inflation, including intervening in the foreign exchange market, expanding the money supply, and purchasing foreign assets.

In 2020, the COVID-19 epidemic broke out and the global economy fell into recession. The Swiss franc was once again driven by safe-haven demand, and the appreciation pressure increased. The Swiss National Bank continues to implement negative interest rates and intervention policies and said it will adjust monetary policy according to the situation.

Characteristics of the Swiss Franc

The Swiss franc is a stable, safe and reputable currency with the following characteristics:

The Swiss franc is one of the strongest currencies in the world, and its exchange rate is affected by a variety of factors, including Switzerland's political stability, fiscal discipline, neutrality, innovation capabilities, high-quality products and services, etc. The Swiss franc is often viewed as a safe-haven currency, with investors seeking its protection when global economic or political uncertainty increases, pushing its exchange rate higher. Conversely, when the global economy or politics is stable, investors seek higher-yielding currencies, causing the Swiss franc to fall.

The Swiss franc is one of the most beautiful currencies in the world. Its banknotes and coins are designed and printed with exquisiteness and elegance, reflecting Swiss culture and history. Swiss franc banknotes use a variety of anti-counterfeiting technologies, including watermarks, holograms, microtext, invisible patterns, colored fibers, etc. The coins of the Swiss franc also have their own characteristics. For example, the 1 franc coin has a cross coat of arms and an oak branch, the 2 franc coin has a cross coat of arms and a daisy wreath, and the 5 franc coin has the story of William Tell's archery.

The Swiss franc is one of the currencies in circulation with the highest face value in the world. Its highest face value is 1,000 francs, which is approximately RMB 6,700. This face value is rarely used in daily life and is mainly used for large transactions or collections. The theme on the 1,000 franc note is "Language", reflecting the multilingual and multicultural character of Switzerland. There is also a special symbol on the 1,000 franc note: a cross and an R in a small circle, which is the signature of Roman Rytz, President of the Swiss National Bank.