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How much does the Swiss franc cost?
In order to be able to do business with other countries, Swiss francs need to be changed into foreign currencies, and vice versa. The rate of exchange indicates how much the franc costs. This rate fluctuates daily.
When the franc rises against other currencies, foreign products become cheaper for buyers in Switzerland. But abroad Swiss products become dearer and are harder to sell. If the value of the franc falls against other currencies, foreign goods cost more in Switzerland. The National Bank therefore also needs to keep an eye on the exchange rate of the franc.
The exchange rate fluctuates because of changes in supply and demand. A stronger and a weaker franc both have desirable and at the same time undesirable effects on the economy.
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A rule of thumb for exchange rates: if the franc is dear, imports are cheap and exports expensive. If the franc is cheap, imports are expensive, while exports are cheaper.
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