by Recent analysis by Credit Suisse, London Business School and Cambridge Judge Business School shows the Swiss franc’s enduring strength. © Sergey Kuzmin – Dreamstime.com The reports says that for a small country with just 0.1% of the world’s population and less than 0.01% of its land mass, Switzerland punches well above its weight financially. The country has had the world’s lowest 117-year average annual inflation rate of just 2.2%. This low inflation is one of the phenomena that has given Switzerland the world’s strongest currency over the last 117 years, both in nominal and real terms. Every currency in the 22 countries in the study depreciated against the Swiss franc over the 117-year period since 1900. Inflation in June 2017 was negative. A drop in the price of fuel and flights was
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Recent analysis by Credit Suisse, London Business School and Cambridge Judge Business School shows the Swiss franc’s enduring strength.
© Sergey Kuzmin – Dreamstime.com
The reports says that for a small country with just 0.1% of the world’s population and less than 0.01% of its land mass, Switzerland punches well above its weight financially.
The country has had the world’s lowest 117-year average annual inflation rate of just 2.2%. This low inflation is one of the phenomena that has given Switzerland the world’s strongest currency over the last 117 years, both in nominal and real terms. Every currency in the 22 countries in the study depreciated against the Swiss franc over the 117-year period since 1900.
Inflation in June 2017 was negative. A drop in the price of fuel and flights was behind month-on-month deflation of 0.1%.
Switzerland’s annualized inflation rate of 2.2%, was only 0.7% lower than runners-up the US and the Netherlands with rates of 2.9%. However when this small difference spans 117 years it has a huge impact. While Switzerland saw prices rise 12-fold, the Americans saw theirs climb 27-fold.
On 20 December 1971 when fixing exchange rates was in vogue, the Swiss National Bank (SNB) fixed the Swiss franc at 3.84 to the US dollar. Later in the 70s the rate went above CHF 4 to one unit of the American currency. During the 80s the direction of the currency pair changed falling to well below 2 francs to 1 US dollar by 1989, according to tradingeconomics.com. This trend has continued. On 5 July 2017 only CHF 0.96 was required to purchase one US dollar, according to Bloomberg.
Great news for Swiss residents travelling abroad during the summer.
More on this:
Credit Suisse report (in English)
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