Frank is still understood to be safe harbor, sounds from Swiss National Bank

Switzerland, franc, Europe, currency

Interest in the Swiss franc as a safe currency does not abate. And it is very likely that demand for it will grow as uncertainty arising from the onset of another wave of covid epidemic increases in world markets.

“We are still in territory where the franc is very high,” said Andrea Mächler, a member of the Swiss National Bank management at a Thursday meeting with journalists. At the same time, she added that she doesn’t know where the Swiss franc course might climb. “The reality is that our currency maintains its reputation as a safe harbor. Uncertainties remain high because the covid crisis is still here with us,” Mächler added.

The fact that inflation, such as Europe or the United States, is also being avoided by Switzerland in favour of the Swiss franc. Its current level stands at just 1.2 per cent in year-on-year terms. However, the strengthening of the franc may eventually turn against the Alpine country, because it is very dependent on the export of its services in particular.

The growing franc then logically auctifies them to foreigners, dampening demand for them. Mächler therefore confirmed the Swiss National Bank’s readiness against too strong a franc to intervene, much like it did six years ago.



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