Swiss Franc – Currency Overview

• ISO Code: CHF
• Symbol: CHF
• Subunit: 1/100 Rappen (German), Centime (French), Centesimo (Italian)
• Inflation: 0.6%
• Nickname: Stutz, Stei, Eier, Swissy

Historical Overview

Although Switzerland began emerging as a unified nation as early as the 13^th century, until 1798 there were approximately 75 entities issuing coins in the country, which lead to the circulation of about 860 different coins, with various denominations and values. These included the thaler, the gulden, and the genevoise.

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In 1798, the newly formed Helvetic Republic instated the Swiss franc, based on the French franc, which was divisible into 10 batzen or 100 rappen. The Swiss franc was made of 6.75 grams of pure silver and equal to or 1.5 French francs. This Franc was issued only during the short five year existence of the Helvetic Republic, but served as a model for several currencies in the re-formed Swiss Confederacy.

The Swiss Franc was adopted as the single official national currency for the entire Swiss Confederation on May 7, 1850, with the Swiss Franc set at par with the French Franc. 1907 saw the foundation of the Schweizerische Nationalbank/Banque Nationale Suisse which became the sole note issuing entity.

The Swiss Franc was the strongest and most stable currency in the world throughout the Twentieth Century, probably due to Switzerland's avoidance of war expenses and social programs that were responsible for inflation in the rest of the world. It has long been considered the safest currency with almost zero inflation and, until 2000, a law requiring that at least 40% of the circulating currency is backed by gold reserves.

Current Global Status

Today, the Swiss franc is the only franc still in circulation and is denoted by the ISO code CHF, which stands for the Confoederatio Helvetica franc in Latin, which is employed as a neutral language in a country with a tetra-lingual populace. The Swiss franc is the fifth most traded currency in the foreign exchange markets as well as the fifth most held reserve currency behind the US dollar, the euro, the yen and the pound sterling.

Against the Euro

In the early 2000s, the Swiss franc's exchange rate with the euro had been stably fluctuation around the rate of 1.55 CHF per euro, rising and falling in tandem with the euro against the U.S. dollar and other major currencies. However, since mid 2006 the franc has lost some considerable ground, opening 2008 at 1.65 CHF per euro.

Against the US Dollar

In 1945, Switzerland joined the Bretton Woods system and the franc was pegged to the U.S. dollar at the exchange rate of $1 = 4.30521 francs. The rate was amended to $1 = 4.375 francs in 1949. Due to the Swiss franc's extremely low inflation, it has steadily gained on the US Dollar throughout the decades, and in March 2008, with US Dollar plummeting against all major currencies, the Swiss Franc traded above one U.S. dollar for the first time.

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