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Swiss National Bank: Used to strong fluctuations
Photo: blickwinkel / IMAGO
Falling exchange rates and the appreciation of the franc caused the Swiss National Bank (SNB) to make a record loss last year.
According to preliminary figures, the central bank recorded a deficit of CHF 132 billion in 2022, as announced on Monday.
This is the largest loss in the central bank's 115-year history.
The SNB therefore intends to forego a distribution.
In the previous year, when a profit of CHF 26.3 billion was posted, the federal government and the cantons received CHF 6 billion and the shareholders CHF 15 in dividends per share.
The largest SNB loss to date of CHF 23 billion came from 2015. Above all, its foreign currency holdings brought the central bank deep red figures of CHF 131 billion.
The result of the SNB depends on fluctuations in the value of its currency reserves of around 800 billion francs.
This includes stocks and bonds from abroad.
The central bank had bought foreign currencies for years in order to prevent the franc, which was in demand as a safe haven in times of crisis, from appreciating.
The value of the gold held by the SNB increased by CHF 0.4 billion last year.
The central bank intends to publish the definitive annual financial statements on March 6th.
Massive losses are not unusual for the SNB, its balance sheet has been subject to extreme fluctuations for a long time.
Also because the SNB – unlike a normal investor – cannot hedge the risk of fluctuations in the value of its gigantic foreign exchange reserves.
If it were to undertake such hedging, this would have an impact on the central task of the SNB: currency stability.
However, the current course is to be continued unchanged for the time being.
“The SNB's colossal losses will not change its monetary policy,” said Karsten Junius, economist at J.Safra Sarasin.
Due to the inflationary pressure, the central bank SNB initiated the turnaround in interest rates in June and raised the key interest rate in three steps to 1.0 percent in 2022 and announced further increases.
Continued massive losses could eat up the central bank's equity.
However, SNB Governing Board member Martin Schlegel explained in a newspaper interview in October that the SNB could also fulfill its task with negative equity.
mike/Reuters