2 Rappen – Switzerland

In 1942, Switzerland's currency situation was defined by its precarious position as a neutral island encircled by the Axis powers and their occupied territories. The Swiss franc (CHF) was under immense pressure, not from hyperinflation, but from the strategic manipulations of wartime finance. The Swiss National Bank (SNB) had pegged the franc to the US dollar at 4.32 CHF since 1936, a peg it maintained throughout the war. This stability was critically important, as Switzerland served as a financial hub and a vital conduit for international trade and intelligence for both sides, requiring a trustworthy and convertible currency.

The primary challenge was the massive influx of capital, particularly gold, from Nazi Germany. Germany purchased essential raw materials and goods from Switzerland using Swiss francs, which it acquired largely by selling looted gold to the SNB. This policy, while economically rational for securing Swiss imports, flooded the central bank with contested assets and created a dangerous financial dependency on the Axis. Domestically, the government implemented strict capital controls, price and wage freezes, and rationing to prevent inflation and hoarding, ensuring that the internal economy remained stable despite external chaos.

Consequently, the Swiss franc existed in a dual state: internally stable and controlled, but externally a key instrument in high-stakes, morally ambiguous financial warfare. Its value was artificially maintained, underpinned by controversial gold transactions that would later draw severe post-war criticism. The currency's strength was less a reflection of pure economic fundamentals and more a testament to Switzerland's managed neutrality, where financial policy was a core instrument of national survival in a continent at war.