The franc is more than euro and dollar: Reading the SNB indices
The new SNB data measure the franc's external value against many trading partners. For prices and wages they are an important pointer – but not a receipt.
Anyone looking at the franc usually sees the rate against the euro or the dollar first. For an open economy like Switzerland, that snapshot is not enough. The Swiss National Bank (SNB) updated its exchange rate indices on 7 October. They are meant to show how the franc has developed against the currencies of its most important trading partners – not just against a single currency.
That sounds like statistics for specialists. In reality, the question touches exporting companies, imported goods and, indirectly, the budgets of ordinary Swiss households. What matters, though, is what the indices actually measure. Anyone who derives an automatic statement from them about falling shop prices or a monetary policy step by the SNB is reading more into the data than they contain.
Not every franc rate is the franc
A euro-franc rate describes the relationship between exactly two currencies. The SNB's nominal effective exchange rate index, by contrast, combines bilateral rates into a trade-weighted measure. What counts is not only direct imports and exports but also competitive situations in third markets. The weights take account of trade in goods and services and are adjusted regularly to reflect trade structures.
When this nominal index rises, the franc appreciates against the currency basket. For a Swiss company, a product abroad tends to become more expensive if the company leaves the price in francs unchanged. Conversely, foreign goods that cost the same in their home currency become arithmetically cheaper. The word «tends» matters: contracts, hedges against currency risk, transport costs and companies' pricing decisions can delay or dampen the effect.
Real does not mean immediately cheaper
Alongside the nominal index, the SNB publishes a real effective exchange rate index. It adjusts the exchange rate movement for price developments in Switzerland and among trading partners. This answers a different question: how is Switzerland's price competitiveness changing? A stronger franc may weigh partly less on an exporting company if prices abroad rise faster. Conversely, a stable currency cannot necessarily secure a competitive position if Swiss costs and prices increase relatively more.
The real index is therefore not an inflation barometer for the next month and certainly not a statement about any individual's wage. It compares price developments across the economy as a whole. For the National Bank, companies and business cycle analysis that is revealing; for a single shopping bag it remains a background variable.
Change is what counts
An index level is also not a price in francs and not a percentage figure for a competitive advantage. It is tied to a base period. It becomes meaningful only as a change over a clearly named period and in comparison with other indicators. Anyone who merely notes that the index is «high» does not yet know whether the franc has moved at all in recent weeks or whether prices among trading partners have changed in parallel. The SNB methodology provides the framework for such comparisons; it does not relieve companies and policymakers of the task of assessing causes and consequences.
Why import prices do not arrive on the shelf one to one
When the franc appreciates, it is often expected that holidays, electronics or food from abroad will become cheaper immediately. That can happen, but it does not have to. An importer may have bought at an earlier rate. A retailer may offset the currency move against higher energy or logistics costs. And for many products, the exchange rate affects only part of the selling price.
The mirror image applies to the export sector. A strong franc can squeeze margins or make price increases abroad harder. How much that weighs varies by industry, sales market and hedging. A medical technology company, a hotel and a retailer are affected differently. The exchange rate index therefore provides a common starting point, but no ready-made balance sheet for a single business.
A compass, not a verdict
The value of the SNB series lies precisely in the fact that it does not hang on a single currency. Anyone who compares the development over several months using the real and the nominal index gets a more sober picture of the external economy than with a single daily rate. But the indices neither explain inflation on their own nor replace an analysis of demand, costs and competition.
For ordinary Swiss residents, this is the fair assessment: a stronger franc can improve purchasing power abroad and become a challenge for companies. Whether it leads to a lower price, higher sales or a monetary policy response is not decided by the index. It makes visible which question has to be asked next.
Sources
Swiss National Bank, exchange rate indices, update of 7 October 2026 Swiss National Bank, data portal «Exchange rate indices» Swiss National Bank, method of the exchange rate indices Swiss National Bank, explanation of the revision of the exchange rate indices
