The Swiss franc is experiencing significant strength early in 2026, having gained 3.5% against the U.S. dollar this year and previously increasing 12.7% in 2025. As of Tuesday, it reached an 11-year high due to global uncertainties, including U.S. trade policy and geopolitical tensions.
Swiss National Bank (SNB) Chairman Martin Schlegel emphasized that escalating geopolitical tensions lead to increased uncertainty, complicating monetary policy in Switzerland. The appreciation of the franc traditionally serves as a safe haven during global instability but adds disinflationary pressure to the nation’s export-driven economy.
Switzerland’s inflation rate currently stands at 0.1%, and the SNB’s key policy rate is 0%. This situation puts the country at risk of disinflation and negative interest rates, which had previously been in effect for seven years before their cessation in 2022.
Giuliano Bianchi, co-founder of Quantitas Institute, noted that while Swiss exports are relatively price-inelastic, a strong franc leads to lower imported inflation, which can negatively affect exporters’ margins and investments.
Additionally, the SNB may find it challenging to intervene in foreign exchange markets to stabilize the franc, especially after a recent trade deal reduced tariffs with the U.S. Despite the complexities, Schlegel reiterated the SNB’s commitment to fulfill its mandate, stating that the bank is prepared to intervene if necessary.
Long-term perspectives on the Swiss franc remain robust, with many experts asserting its status as one of the strongest currencies globally, bolstered by factors like safe haven appeal amid geopolitical unrest and a persistent current account surplus.
The potential for future interventions by the SNB will depend on balancing price stability with economic growth, with increasing scrutiny from political dimensions in light of international trade relationships.
Source: Reported based on publicly available information from www.cnbc.com.
