Are you eager to get familiar with the history of the Swiss Franc? Do you know which events made the Swiss Franc a strong currency? Officially abbreviated as CHF, the Swiss Franc is the legal tender as well as the national currency of Switzerland. The banknotes of this world famous currency are issued by the Swiss National Bank which has headquarters in Zurich and Bern. Since Switzerland has several national languages like French, German and Italian, the banknotes and coins are issued in these languages owing to their officiality. If you are wondering why the Swiss Franc is the most expensive currency, the wait is finally over as this article is sure to answer all your questions.
A Brief History And Overview Of The Swiss Franc
The Swiss Franc has a rich and long past which is worth exploring. What might surprise you is the fact that the history of this currency dates back to the 18th century. There were around 860 coins in circulation before 1798 and all of them had varying values and monetary systems. The entities involved in the making of these coins were cantons and abbeys. The 18th century marked the emergence of new Swiss currencies in the country and led to a decline in the popularity of coins.
While the older coins still existed in the form of small change, they were largely superseded by foreign coins like Brabant Dollars which were widely recognized. This event was a direct result of the shortcoming of the Swiss cantons who could not keep up with the pace of depreciation. Things took a major turn in 1848 when the Swiss Federal constitution stipulated that only the federal government would be authorized to issue money in the country.
The Swiss Franc was formally introduced as a monetary unit in 1850. At the time of introduction, the Swiss Franc was at equivalence with the French Franc, which once used to be the currency of France.
Reasons That Made Swiss Franc One Of The Most Expensive Currencies
Let us take a look at the 5 most notable reasons that turned Swiss Franc into one of the world's most expensive currencies.
1. Rise of sovereign debt crisis
The emergence of the European sovereign debt crisis in 2000 led to a substantial increase in the value of the Swiss Franc. The crisis weakened the US dollar and diminished its appeal to a great extent. After the value of the US dollar declined globally, the Swiss Franc was strengthened significantly and its demand also rose.
2. Adoption of loose monetary policy
It must be noted that the dominance of the US dollar was also slackened by the implementation of the loose monetary policy by the Federal Reserve. On the bright side, the adoption of the loose monetary policy proved fruitful in the long run. The reason being that it greatly contributed to the increase in the franc's value.
3. Wise policies and low debt levels
Today, the Swiss Franc stands as the world's most stable currency all thanks to Switzerland's adherence to judicious monetary policies and low levels of debt. Given its political stability and transparent legal system, Switzerland attracts huge foreign investments all year round.
4. Safe haven for international investors
The Swiss Franc can prove to be a great investment as its value tends to appreciate in times of political turmoil and economic recession. Since there is no systematic screening of foreign investments in the country, the Swiss Franc is deemed a safe-haven for affluent investors looking to withstand market uncertainty.
5. Excellent GDP growth
The high living standards and unrivaled GDP growth rates of Switzerland make it crystal clear why the Swiss Franc is so expensive. Over the years, the value of the Swiss Franc has risen exponentially against some of the world's major currencies including the US dollar and Euro. Presently, the Swiss Franc stands at the 9th position in the list of the world's strongest currencies in 2021, one step ahead of the US dollar which is at the 10th spot. (source)
If you have plans to visit Switzerland in the near future, you must exchange currency beforehand to avoid last-minute hassles. Here are the top reasons why you should leverage an online forex platform to get Swiss currency for your upcoming trip.
1. Live and guaranteed best rates
The Swiss Franc has come to be known as the strongest currency worldwide since its demand is at an all-time high among leading investors. When it comes to getting hold of Swiss Francs for international visits, web-based forex platforms are your best bet for cost-effective exchange deals. While you can also approach private banks for currency exchange purposes, you may have to bear up to 3% conversion charges.
Similarly, you should also stay away from airport exchange counters as their margins can go up to 12% during peak seasons. On the other hand, top-notch online forex marketplaces can make it possible for you to save as much as 6% over most banks. Web-based forex platforms make comprehensive comparisons of exchange offers across multiple reputed vendors to give you live and guaranteed best rates.
2. Freeze your favorite rate
The biggest upside of leveraging an online foreign exchange portal is that you get the special opportunity to freeze live rates. The rate freezing feature can come handy when the ongoing currency exchange rates do not suit your preferences. The best part is that you just have to pay a paltry fee amounting to 2% of your order's total value to avail the rate lock-in facility.
Once you pay the fee online, you can reserve your preferred exchange rate for a maximum period of 3 working days. But if the prevailing rates fail to satisfy you, there is no need to lose hope as the rate alerts can turn out to be a boon in such cases. You simply have to choose your favorite rate and opt for the rate alert service. After the rate you want goes live, you will instantly be notified through email or SMS.
3. Load Swiss Franc in forex card
There was a time when saving money while exchanging currency was next to impossible. However, things have changed altogether with the advent of forex cards. While carrying foreign currency in the form of banknotes has long been the traditional approach, prepaid forex cards can help you save big during your travel. What's noteworthy is that travel forex cards are widely accepted in Switzerland.
Instead of carrying a big bundle of banknotes, you can load some amount of Swiss Franc into your forex card for added convenience. Above all, a CHF forex card can easily be bought at reasonable rates from an online foreign exchange platform. Do not worry about security as forex cards are known for their outstanding PIN protection mechanism which ensures that no one except you can pay with the card. They also include a free insurance cover.
There is no denying the fact that the Swiss Franc is emerging as the highest currency in the world. Investors use the Swiss Franc as a backup against geopolitical tension and unexpected economic difficulty. A getaway to Switzerland can ensure a luxurious travel experience given that you take care of your forex needs in advance. Just make sure you rely on a trusted online forex platform to get the Swiss Franc at the best possible exchange rates.