When the Rupee Meets the Alps: How India’s Currency Lost Its Footing Against the Swiss Franc

The Indian rupee hasn’t just slipped—it’s taken a tumble down the Swiss slopes. Over the past three months, the INRCHF currency pair has fallen by a dramatic 10%, prompting whispers in trading rooms and boardrooms alike: what’s fueling this rare and relentless slide?

The Swiss Franc: Fortress of Global Anxiety

To understand this currency drama, picture Switzerland as the world’s mountain refuge—unassailable, serene, and forever in demand when global weather turns foul. In 2025, the Swiss franc (CHF) has soared, gaining nearly 11% against the dollar—its biggest rally since 2011. Safe-haven flows have poured in as geopolitical clouds darken over Europe and the Middle East, and as the Russia-Ukraine war grinds on. The franc’s reputation for stability is legendary, but 2025 has seen it transformed from stable rock to financial magnet.

Investors fleeing uncertainty have loaded up on CHF, while the Swiss National Bank (SNB) has tried to keep a lid on runaway appreciation, even slashing rates below zero (-0.25%) and warning of further intervention. The result? A currency so strong it’s made Swiss chocolates pricier in Mumbai—but has also made the rupee look fragile by comparison.

India’s Economic Waltz: Gold Glitters, Rupee Stutters

Meanwhile, India’s own story is a patchwork of strong macro numbers and peculiar vulnerabilities. On paper, the economy looks remarkably resilient: retail inflation has plummeted from 5.4% last year to just 2.1% in June 2025—the lowest in six years. Foreign direct investment surged 14% year-on-year, and foreign reserves stand at a formidable $696 billion. But beneath the surface, cracks have emerged.

India’s trade deficit, though narrowed by about 30% in May, has been buffeted by an unexpected surge in gold imports—up an astonishing 331% year-on-year in late 2024, making gold (at $14.9 billion) the single largest import item, even surpassing crude oil. The government’s tariff cuts and duty-free access via new trade agreements have only accelerated this gold rush, swelling current account pressures and weighing on the rupee.

Monetary Policy: Two Central Banks, Two Stories

Currency pairs are a tug-of-war, and in this contest, the rope has moved sharply in the Swiss direction. The Reserve Bank of India (RBI) slashed its repo rate by 50 basis points to 5.5% in April—the first cut this year—and maintained a neutral stance thereafter, aiming to support growth in the face of global trade headwinds. In contrast, the SNB, despite already negative rates, is signaling even deeper cuts to counter deflation and keep its exporters alive amidst a surging franc.

But here’s the twist: while both central banks are easing, the SNB’s actions have failed to stem the franc’s rise. The “negative interest rate experiment” is back, but capital keeps flowing to the Alps, undeterred by the cost. The RBI, for its part, is boxed in—unable to cut aggressively for fear of stoking capital outflows, especially as the US Federal Reserve and European Central Bank remain dovish. The upshot: monetary policy divergence hasn’t weakened the franc, but it has undermined the rupee’s appeal.

Geopolitics and the Gold Dilemma

2025 has been a masterclass in how geopolitics can move currencies. The war in Ukraine, persistent US tariff threats, and Europe’s energy scramble have kept risk aversion elevated. Switzerland’s neutrality and banking prowess have turned the CHF into a vault for nervous capital. Meanwhile, India’s closer ties to Russia (to secure cheap energy) and its reluctance to pick sides have exposed it to Western trade spats and volatile commodity prices.

The gold surge, partly a hedge against global uncertainty and partly a reflection of cultural demand, has worsened the rupee’s plight. With gold imports now 21% of total merchandise imports, every new gold bar arriving at Indian ports is another weight on the INR—especially as importers must buy dollars (and euros, and yes, francs) to pay their bills.

Not Just Numbers: The Human Side of the Slide

For Indian students in Zurich and Geneva, the summer of 2025 is a cold one: tuition payments are up 10% in rupee terms. Swiss watches, always a status symbol in Mumbai and Delhi, now cost as much as a small hatchback. Indian exporters of organic chemicals and textiles to Switzerland are seeing their margins squeezed, while Swiss pharma and engineering giants gain even more pricing power in the Indian market.

The Ticking Clock: What Traders Are Whispering

Can the rupee regain its footing? Not unless the safe-haven fever breaks or India plugs its gold addiction. As long as the world seeks shelter in the Alps and Indians crave bullion, the INRCHF pair will remain at the mercy of forces beyond spreadsheets: fear, tradition, and the search for safety in a world on edge.

The past three months have not just been a story of one currency falling and another rising—they’ve been a study in how global anxieties and local appetites can collide, sending even the sturdiest economies skidding. For now, the rupee’s shoes are still slipping on Swiss ice.