The exchange rate between the Swiss Franc (CHF) and the Indian Rupee (INR) has recently been shaped by significant developments impacting both currencies. The current value of CHF to INR is 110.9, which is slightly above its three-month average, indicating a relatively stable trading range of 3.2%, fluctuating between 108.7 and 112.2.
Analysts have noted that the Swiss National Bank (SNB) is maintaining a zero interest rate policy due to economic concerns stemming from new U.S. tariffs imposed on Swiss exports, particularly affecting key sectors like machinery and watchmaking. This governmental stance reflects a cautious approach to foreign currency management, with reports indicating that the SNB has increased its foreign currency purchases significantly to counter the appreciating CHF. The unexpected dip in Swiss inflation, falling to 0.1% year-on-year, has further compounded the SNB's reluctance to alter monetary policy, as inflation metrics may provide insufficient justification for interest rate changes.
Conversely, the Indian Rupee has faced downward pressure, reaching a record low of 88.62 against the U.S. dollar. This decline has been attributed to increased H-1B visa fees and weakened foreign equity inflows. The Reserve Bank of India's recent interventions, expanding its dollar forward positions, signal attempts to stabilize the rupee amidst persistent demand for dollars from importers. Experts suggest that ongoing challenges within India's manufacturing sector and a narrowing policy rate differential with the U.S. could further exacerbate pressures on the INR.
Given these dynamics, the CHF is likely to remain stable or face minor fluctuations against the INR. Economists suggest that as the SNB continues its current monetary policy without significant inflationary or economic pressures, and as the RBI actively works to stabilize the INR, these factors will play a key role in determining the CHF/INR exchange rate in the coming months. Careful monitoring of both central banks' policies and economic indicators will be crucial for individuals and businesses engaged in international transactions.
