The Swiss franc, known as CHF, has long been considered a safe haven currency due to Switzerland's strong economy, political neutrality, and low inflation rates. It has gained value against the euro and the U.S. dollar, attracting international investors seeking stability.
Switzerland's political stability, strong rule of law, neutral stance in international affairs, Western approach to business, and low inflation rates have all played a crucial role in the franc's stability.
The Swiss National Bank's non-interventionist policies have also contributed to the currency's strength.
The demand for the Swiss franc surged after the 2008 financial crisis. As of the first quarter of 2024, the SNB reported foreign exchange reserves amounting to USD 884 billion (CHF 797 billion).
The SNB pegged the currency to the euro in 2011 but abandoned the peg in 2015, resulting in a significant appreciation of the franc.
For investors looking to gain exposure to the Swiss franc, exchange-traded funds (ETFs) provide a more accessible option.
The Swiss franc's status as a safe haven asset continues to attract attention, making it a popular choice for diversifying portfolios.