Tourists wanting a cup of coffee in Zurich these days will pay dearly for the privilege: A single cup at Café St. Gotthard costs $8.30 at Tuesday’s exchange rate, according to a Bloomberg report. A Big Mac costs 128% more in Switzerland than in the U.S., up from 72% more in 2010.
Christoph Blocher, a billionaire entrepreneur and former justice minister for Switzerland’s People’s Party, was quoted saying, “The franc is catastrophically overvalued.” With the value of a Swiss franc so high that ordinary goods become prohibitively expensive, Switzerland is contemplating drastic action.
The form that action may take is undetermined, although Thomas Jordan, vice president of the Swiss National Bank, said that “a whole range of options” was being considered. One of those may be a target for the franc. With the Swiss currency 39% overvalued against the euro, as determined through purchasing power parity by the Organization for Economic Cooperation and Development, everything is at risk, including wages.