Most central banks worry about a currency falling. The Swiss National Bank (SNB) has spent much of the last fifteen years worrying about the opposite. A rising franc makes Swiss exports dearer and imports cheaper, which can push inflation down toward zero or below. That is not a comfortable problem, and it explains a surprising amount of what the franc has done.
Start with size. The Bank for International Settlements counted the franc on one side of 6.4% of global foreign exchange trades in April 2025, sixth among currencies. Small for a country of this size, you might think. But that figure undersells its role as a place to hide.
What the SNB says about the franc
The SNB’s own explainer on what determines the franc gives a plain account. Swiss interest rates are often lower than elsewhere, because of low inflation and political and economic stability. Meanwhile the franc “gained significantly” in times of uncertainty, such as the global financial crisis and the European debt crisis, because some investors accept lower returns to hold it. The SNB lists the pandemic and Russia’s attack on Ukraine among the later episodes of uncertainty.
The franc also has a long record as a store of value, which is part of why savers trust it. Swiss inflation has been low by international standards for decades.
Note the odd combination. A currency that holds its value is attractive to savers. A currency that keeps its value and rises in a crisis is very attractive to anyone nervous. That demand pushes the price up, and a higher price hurts the country that issues it. Hence the tug of war.
Five dates for the franc
| Date | What happened |
|---|---|
| 6 Sep 2011 | SNB introduces a minimum rate of CHF 1.20 per euro |
| 15 Jan 2015 | Minimum rate scrapped without warning; deposit rate cut to -0.75% |
| 22 Sep 2022 | Policy rate raised 75 basis points to 0.5%, ending the negative-rate era |
| 19 Jun 2025 | Rate cut from 0.25% to 0% |
| 24 Sep 2026 | Rate left at 0% |
Those first two rows are the story that matters most.
The euro floor, 2011 to 2015
In 2011 the euro-area debt crisis sent money into Switzerland. The franc surged. On 6 September 2011 the SNB declared it would not tolerate a euro worth less than 1.20 francs, and would enforce that by buying foreign currency. In a speech the SNB called the floor an “exceptional and temporary measure” adopted when the franc was markedly overvalued.
It held for more than three years. Then on 15 January 2015 the SNB abandoned it, with immediate effect, and cut the interest rate on sight deposits to -0.75%. SNB chairman Thomas Jordan gave the reasons in a speech that same day: the franc’s overvaluation had eased since 2011, monetary policy in the major currency areas was diverging, and the euro’s sharp fall against the dollar had also weakened the franc against the dollar. Defending the floor was no longer justified.
Even then, the SNB warned that the franc was still overvalued after the floor went, and that the stronger franc would weigh on Swiss economic activity in 2015. Anyone holding euros and owing francs, or the reverse, found the ground had shifted that morning.
A floor, like a peg, is a promise to keep buying until the market gives up testing you. It works until the cost of keeping the promise exceeds the cost of breaking it.
A worked example: what a franc jump does to a bill
Take a made-up family in the euro area with a CHF 8,000 charge to pay in Switzerland, say rent and school fees. All figures here are illustrative.
- At the old floor of 1.20 francs per euro, the cost is 8,000 / 1.20 = €6,666.67.
- If the euro buys only 1.05 francs, the same charge is 8,000 / 1.05 = €7,619.05.
That is an extra €952.38. Put differently, the franc has risen 14.3% against the euro (1.20 / 1.05 minus 1), and the family’s bill has risen 14.3% as well. For a household with euros and Swiss obligations, a move like that arrives at once and with no warning. That is the reason frequent cross-border payers sometimes arrange the conversion in advance rather than leaving it to a single day. You can check where a pair stands now on EUR to CHF; rates refreshed hourly.
Negative rates, zero rates and the carry link
After 2015, Switzerland sat in negative-rate territory for years. The rate stayed at -0.75% until June 2022, when a first rise in 15 years took it to -0.25%. On 22 September 2022 the SNB raised it by 75 basis points to 0.5%, ending the negative-rate era. The SNB cut to 0% on 19 June 2025 when Swiss inflation turned negative (-0.1% in May 2025, the first negative reading since 2021), and it left the rate at 0% at its September 2026 assessment.
Low rates matter for a currency in a specific way. In 2015 the SNB said lower rates would make franc investments less attractive and so offset the effect of dropping the floor. They also make the franc a cheap currency to borrow in. If you borrow francs, switch into a higher-yielding currency, and the franc then stays put or falls, you profit. The SNB’s September 2026 summary of discussion noted that the franc had depreciated by about 3% in trade-weighted terms since June, tracking wider interest-rate gaps, and that this made the franc more attractive as a funding currency for carry trades. The same logic applies to the yen, though Japan’s economy and history differ.
On intervention, the SNB stated that it remains prepared to intervene in the foreign exchange market as needed to secure appropriate monetary conditions, adding that an increased willingness to intervene was no longer necessary in the current environment. That is a statement about September 2026, and it may change.
One practical consequence for anyone comparing quotes: because policy rates, intervention and safe-haven flows all feed the franc at once, two providers quoting the same pair an hour apart can look very different, and a quote only tells you the price at that moment. Compare the amount you will actually receive, not the headline rate.
What this means for ordinary conversions
Do not assume the franc is “always up”. It rose over fifteen years, but the SNB’s own September 2026 summary says the franc depreciated by about 3% in trade-weighted terms between its June and September assessments. Safe haven demand is a tendency that appears in stress and can fade quickly.
Expect sharp moves around SNB decisions. SNB decisions can move the pair, and in January 2015 the floor was dropped without warning. A large payment tied to a precise date carries risk either way.
Know which pair you are on. Franc against the euro depends on Swiss and euro-area policy. Franc against the dollar, such as USD to CHF, also depends on what the Federal Reserve does. The Swiss franc page has the whole set.
The honest summary: the franc has kept its domestic purchasing power unusually well, and its exchange rate can still jump. Those two facts sit together without contradiction. Nobody knows what happens next, including the SNB.
Sources
- Swiss National Bank: What determines the Swiss franc exchange rate?
- Swiss National Bank: speech of 26 March 2015
- BIS: Thomas Jordan, The rationale for discontinuing the minimum exchange rate and lowering interest rates
- Swiss National Bank: Monetary policy assessment of September 2026, summary of discussion
- CNBC: Swiss central bank hikes interest rate (22 September 2022)
- Le News: Swiss interest rate cut to zero (June 2025)
- BIS: OTC foreign exchange turnover in April 2025
Checked: November 2026
