The Swiss National Bank reported an annual loss of 132 billion Swiss francs ($143 billion) in 2022, the largest in its 115-year history, as the value of its share and bond portfolio fell due to falling stock and fixed-income markets.
A stronger Swiss franc had a negative impact as well.
Monday's preliminary figure, a reversal from a 26 billion franc profit in 2021, was far greater than the previous record loss of 23 billion francs in 2015. It amounts to slightly more than Morocco's annual GDP.
On March 6, the SNB will release detailed annual figures.
It lost 131 billion Swiss francs on its foreign currency positions, which included more than 800 billion francs in stocks and bonds purchased during a long campaign to weaken the Swiss franc.
Last year, global stock markets and bond prices fell as central banks around the world, including the SNB, raised interest rates to combat inflation.
The strong Swiss franc, which rose above parity against the euro in July, resulted in exchange-rate losses.
The SNB's gold holdings, which stood at 1,040 tonnes at the end of 2021 and gained 400 million francs in value during 2022, were the only bright spot.
The central bank stated that due to the 2022 loss, it will not make its usual payment to the Swiss central and regional governments. The SNB distributed 6 billion Swiss francs last year.
Nonetheless, the loss is unlikely to affect SNB policy. According to analysts, it raised interest rates three times in 2022 as Chairman Thomas Jordan sought to reduce high Swiss inflation.
"The SNB's colossal losses will not change its monetary policy at all," said Karsten Junius, an economist at J.Safra Sarasin. "The high reputation of the SNB helps that it doesn't have to change anything."
(Source:www.usnews.com)
A stronger Swiss franc had a negative impact as well.
Monday's preliminary figure, a reversal from a 26 billion franc profit in 2021, was far greater than the previous record loss of 23 billion francs in 2015. It amounts to slightly more than Morocco's annual GDP.
On March 6, the SNB will release detailed annual figures.
It lost 131 billion Swiss francs on its foreign currency positions, which included more than 800 billion francs in stocks and bonds purchased during a long campaign to weaken the Swiss franc.
Last year, global stock markets and bond prices fell as central banks around the world, including the SNB, raised interest rates to combat inflation.
The strong Swiss franc, which rose above parity against the euro in July, resulted in exchange-rate losses.
The SNB's gold holdings, which stood at 1,040 tonnes at the end of 2021 and gained 400 million francs in value during 2022, were the only bright spot.
The central bank stated that due to the 2022 loss, it will not make its usual payment to the Swiss central and regional governments. The SNB distributed 6 billion Swiss francs last year.
Nonetheless, the loss is unlikely to affect SNB policy. According to analysts, it raised interest rates three times in 2022 as Chairman Thomas Jordan sought to reduce high Swiss inflation.
"The SNB's colossal losses will not change its monetary policy at all," said Karsten Junius, an economist at J.Safra Sarasin. "The high reputation of the SNB helps that it doesn't have to change anything."
(Source:www.usnews.com)