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Liechtenstein is a micronation in Europe with an industrialized economy, which has transitioned remarkably from an agriculturally based economy. Liechtenstein participates in economic forums such as the European Free Trade Association. The country has a strong banking sector which encourages foreign investment. Liechtenstein is one of the developed economies in Europe with a GDP of more than 3.2 billion US dollars. The country experiences a low inflation rate of about 0.2% and enjoys relative stability due to its participation in the customs area, which allows free trade with the members. Since the country has a customs union with Switzerland, it adopted the Swiss franc as the official legal tender.
The use of currency in Liechtenstein dates back to as early as the 18th century. Currencies that have been previously used in the country include the kreutzer, thaler, and the ducat. These currencies were produced using gold and silver. These coins mainly had inscriptions of the prince. The use of currency in Liechtenstein has been under the direct influence of the political conditions of the principality at any given time. Previously, the principality used the Liechtenstein krone currency until 1920, when the Swiss franc was introduced as the legal currency. The krone served as the currency in the principality in the period between 1898 and 1921. The krone existed in divisions of 100 units. Each division was called a heller. The Liechtenstein krone came in denominations of 1, 2, 5, 10, and 20 kroner. Instability of the krone following the World War I necessitated the introduction of a new currency.
The Swiss Franc
The Swiss franc is the legal currency of Liechtenstein by virtue of the country being a member of the European Economic Area with shared customs with Switzerland. The country adopted the Swiss franc as its currency in 1920 following the signing of the Customs Treaty in 1919, which placed Liechtenstein in a common economic area with Switzerland. The Swiss National Bank is the central body responsible for issuing the Swiss franc. Minting of the Swiss franc coin is done by the Swissmint, while Orell Fussli Arts Graphics prints the banknotes. The Swiss franc has the symbol CHF. Each franc is divided into 100 subunits called rappen (Rp). Coins come in denominations of 5, 10, and 50 centimes and 1, 2, 5, 10, 20, 50, and 100 francs. Banknotes come in denominations of 10, 20, 50, 100, 200, and 1000 notes. The Swiss bank has released banknotes in eight series, and is in the process of issuing a ninth series. Banknotes are issued in various dimensions with the size increasing as the value increases. The ninth issue of the Swiss franc banknotes is regarded as one of the most secure currencies in the world due to its advanced number and technicality of security features. The Swiss franc is exchanged with the US dollar at a rate of one Swiss franc for every 1.03878 US dollars. Liechtenstein also mints Swiss franc coins with the country’s imprints for commemorative purposes. The Swiss franc had gone through a period of fluctuation during economic crisis leading to overvaluation, especially in the period from 2011 to 2014, when the Swiss franc had a value lower than the US dollar and the euro.
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