[News Terms] The 'Swiss Franc' Soaring in Value Due to War

Swiss Franc is the Legal Tender of Switzerland and Liechtenstein
Strengthens as a Safe Asset Amid Israel-Palestine Conflict

The 'Swiss franc (franc)' is the official currency of Switzerland and Liechtenstein. The ISO 4217 (an international standard for currency codes) code is CHF, the currency symbol is Fr, and sFr is used to distinguish it from other franc currencies.

Switzerland rejected EU membership in a referendum held on March 4, 2001, with 76.8% voting against, and thus continues to use the Swiss franc instead of adopting the euro.

Swiss franc.
[Photo by Swiss National Bank]

The Swiss National Bank first issued banknotes of 1000, 500, 100, and 50 francs in 1097 and has since replaced the currency nine times. On April 8, 2016, the 8th series of banknotes began to be phased out and replaced by the 9th series. The most recent banknote, the 100 franc note, was issued on September 12, 2019. Currently, banknotes of 1000, 200, 100, 50, 20, and 10 francs are in circulation, along with coins in denominations of 5, 2, 1, and ½ francs, as well as 20, 10, and 5 centimes (or Rappen).

The banknotes are made with a three-layer structure of paper-polymer-paper and feature a transparent window in the shape of the Swiss cross (+). Various anti-counterfeiting features such as microtext, optical interference patterns, hidden images, and holograms are embedded. Coins are made of copper, brass, and cupronickel, with serrated edges and inscriptions corresponding to their denominations.

According to the European Central Bank (ECB) and others on the 18th (local time), the exchange rate of the Swiss franc was trading at around 1.05 euros per franc and 1.11 dollars per franc. The Swiss franc to euro exchange rate reaching 1.05 is the first time since September last year. At that time, the Swiss franc reached an all-time high against the euro, and it has now regained that peak after about a year. Compared to the dollar, the Swiss franc is also overvalued. On this day, the Swiss franc to dollar exchange rate was 1.11. The won to Swiss franc exchange rate was around 1500.72 won. 100 Swiss francs are equivalent to 150,000 won, and 1000 francs are a whopping 1,500,000 won.

Due to the sudden instability in the Middle East caused by the attack by the Palestinian armed group Hamas and Israel's retaliatory response, the Swiss franc is being seen as a safe-haven asset and is strengthening. Amid concerns that armed conflict could spread to neighboring countries, the market sentiment that Switzerland's currency is safe due to its neutral diplomatic stance is spreading, and the Swiss franc is expected to remain strong for the time being.