Description

Introduced in 1850, the Swiss franc (CHF) is the official currency of Switzerland, Liechtenstein and the Italian exclave of Campione d'Italia, and is the only franc remaining in Europe.

The central bank of Switzerland, Swiss National Bank (SNB), issues the Swiss franc banknotes, which come in six denominations: 10 francs, 20 francs, 50 francs, 100 francs, 200 francs and 1,000 francs. CHF is subdivided into 100 units, with a hundredth of the Swiss franc called Rappen (Rp.) in German, centime (c.) in French, centesimo (ct.) in Italian, and rap (rp.) in Romansh. Swiss franc coins are issued by the federal mint, called Swissmint, in seven denominations: 5 centimes, 10 centimes, 20 centimes, 1⁄2 franc, 1 franc, 2 francs, 5 francs.

The Swiss franc, ranked as the seventh most traded currency in the world, has gained in popularity mainly due to being a safe-haven currency. Therefore, many governments and financial institutions hold CHF as a hedge against instability in many types of investments and markets.

Economy

• Switzerland has one of the most advanced free market economies in the world, with the service sector accounting for almost 74 percent of the total gross domestic product (GDP).
• In 2020, Switzerland ranked as the 18th largest national economy by nominal GDP, with the country’s GDP being estimated at almost US$750 billion.
• The service sector plays a vital role in Switzerland’s economy, especially the Swiss banking industry and tourism.
• In 2016, it was reported that Switzerland was the world’s third richest landlocked country, next to Liechtenstein and Luxembourg.
• Export products include agricultural products, metals, chemicals, watches and machinery.
• Import products are vehicles, metals, textiles, machinery and agricultural products.
• Approximately 28 percent of all offshore funds are banked in Switzerland.
• The country is neutral and not part of the European Union or EEA. It is, however, a part of the single market and has a number of bilateral treaties with the EU.
• Switzerland’s inflation has been relatively low over the years, amounting to 0.4 percent in 2019.

History

• In 1798, the franc was introduced and used until 1803 along with other foreign currencies, with over 8,000 different coins and banknotes in circulation.
• In 1848, Switzerland declared that the federal government of Switzerland would be the official issuer of money in the country.
• In 1850, under the Federal Coinage Act, the first Swiss franc was introduced, as the monetary unit of Switzerland, at par with the French franc.
• In 1865, Switzerland became part of the Latin Monetary Union, along with France, Italy, Switzerland, and Belgium, under which they agreed to adopt the gold standard, legally maintaining it until 2000.
• In 1945, Switzerland decided to become part of the Brent Wood System. The Swiss franc was pegged to the US dollar.
• From 2003 to 2006, the Swiss franc was stable against the euro (EUR).
• In 2015, the Swiss National Bank suddenly abandoned its peg to the euro and allowed the currency to float, causing major damage on stock and forex markets with some investors and firms being wiped out as a result of the huge sell-off.

Trivia

• The ‘swissie’ is a nickname for the Swiss franc.
• Four national languages of Switzerland, such as Germany, Romansh, French and Italian, are featured on all Swiss franc banknotes.