The Swiss Franc as a Safe Haven

Why investors buy Swiss francs during global crises, how this pushes the franc up and hurts exporters, and why Switzerland has had negative interest rates.

The Swiss franc is a safe-haven currency.

Why

Political stability.
Low inflation and sound public finances.
Strong central bank.
Neutrality.

Crisis effect

During global crises, like 2008, the euro crisis or 2020, investors buy francs, pushing its value up.

Problem for exporters

A strong franc makes Swiss exports expensive, hurting watchmakers, machinery firms and tourism.

Central bank responses

The Swiss National Bank (SNB) buys foreign currencies to weaken the franc, building huge foreign reserves.
It used negative interest rates of -0.75 percent from 2015 to 2022.
It cut rates back to zero in 2025.

Low inflation

A strong franc keeps import prices low, so Swiss inflation is typically very low.

The expensive watch

When the franc strengthens during a crisis, a Swiss watch costs more in euros and dollars, and some buyers choose cheaper brands.

Thinking a strong currency is always good

It can hurt a country's exporters.

Key takeaways

The Swiss franc is a safe-haven currency.
Crises push it up, hurting exporters.
The SNB buys foreign currency and used negative rates.
A strong franc keeps inflation low.