Swiss francs as one of the most reliable currencies

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Until the middle of the nineteenth century, hundreds of types of banknotes and denominations were in circulation in Switzerland. In accordance with the decree of the time of Napoleon, the bishoprics and cantons issued their own money. We can say that Swiss francs appeared in the fifties of the century before last. Helvetic coins at that time were cast from silver. Their cost was initially equivalent to face value. However, the government of the Swiss Confederation did not have a monopoly in the production of money.

In other words, each individual bank could issue notes.

The increase in the amount of paper money gradually contributed to their devaluation. Therefore, in 1907, Switzerland had its own National Bank. At the height of the First World War, this country, like many other European states, decided to abandon the gold standard. Thus, all the expenses of that difficult time were covered with the included printing press. However, Switzerland, unlike a number of other states, avoided inflation after the end of hostilities in Europe. The printing press that stamped banknotes was turned off, followed by a return to the gold standard. Swiss francsstrengthened their positions. They became one of the strongest currencies in the 1920s, along with the Dutch florins.

The strengthening of the franc was explained by the following

reasons: neutrality during the war years, which made it possible to avoid colossal spending on military operations; return to the gold standard and the ensuing fight against inflation. The events of the 1930s shocked the United States and Europe, if not the whole world. Some of the leading countries in Europe were forced to abandon the gold standard. But all this did not negatively affect the economic situation of the Confederation. The Swiss franc has been one of the most reliable currencies in the world for a long time. However, in the early seventies, an event occurred that affected the economies of many countries. The Bretton Woods system, according to which all currencies were pegged to the dollar, and he, in turn, to the gold reserve, showed its complete failure, after which all its participants abandoned it. This forced the Confederate government to introduce floating rates.

Swiss francs are still a reliable currency today. They didn't even get hurt

during the financial crisis that shook the economy of many countries. They are sometimes informally referred to as "safe haven currency". Each franc is divided into one hundred rapps, or centimes. The national currency is controlled by the authorities of the Confederation. The Swiss franc is related to the euro as 1:0, 81. Recently, the common currency of the EU has been gradually losing ground to the money of the Confederation. itdue to the fact that the growth rate of the European economy as a whole is declining. The Swiss franc is related to the ruble as 1:35.5 today. The exchange rate of the Russian currency is gradually falling against it.

Switzerland has long been a kind of magnet attracting large foreign capital. Many we althy people leave part of their funds in the banks of this country. This is due to the stable political and economic situation in Switzerland, the quality of service. The risks of investing in banks of the Confederation are minimal. There is always an opportunity to withdraw your contribution. Swiss banks provide a full range of services to their clients. All this helps to attract foreign capital, which ensures the continued stability of the national currency.