Stronger Swiss franc drives up prices, hitting tourism industry

Global Business

One of the world’s strongest currencies, the Swiss franc, just got a lot stronger after the franc was unpegged to the euro — and a lot of Swiss are unhappy about that. The sudden jump in value has pushed up prices and hit the tourism industry hard, but some analysts said the floating of the franc earlier this month by the Swiss Central Bank was long overdue and will bring benefits. CCTV’s Jack Barton reported this story from Davos, Switzerland.

Stronger Swiss franc drives up prices, hitting tourism industry

Stronger Swiss franc drives up prices, hitting tourism industry

One of the world's strongest currencies, the Swiss franc, just got a lot stronger after the franc was unpegged to the euro -- and a lot of Swiss are unhappy about that. The sudden jump in value has pushed up prices and hit the tourism industry hard, but some analysts said the floating of the franc earlier this month by the Swiss Central Bank was long overdue and will bring benefits. CCTV's Jack Barton reported this story from Davos, Switzerland.

The Swiss franc rose by more than 40 percent against the euro earlier this month after the country’s central bank let it float freely. It’s since shed about half that initial gain, but Switzerland’s tourist industry is worried.

“The problem in Switzerland — our food is too expensive. If a family goes out with children to eat that’s too expensive,” the owner of tourist shop Swiss Alp Fantasy Esther Heldstab said.

Tourists were already shocked when their well-planned budgets have been blown.

“Certainly as a tourist coming from Paris — where I thought it was expensive — here it’s shockingly expensive.” a consultant from United States Loy Sheflott said.

It’s not just visitors who are complaining, around the world, finance and foreign exchange houses have been battered, with at least three major international banks reportedly losing $100 million or more each.

But a free-floating franc also has plenty of supporters.

“Floating currencies are the normal way of doing things and probably in the long run it will be best for the people of Switzerland and best for people everywhere,” David Jacobson, vice chairman of BMO Financial Group and former U.S. Ambassador to Canada, said.

The good news for the Swiss is that imports from the European Union just got a whole lot cheaper.