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Swiss National Bank loses $3.6 billion in 2023
Global Banking & Finance Review®
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ZURICH (Reuters) -The Swiss National Bank posted an annual loss of 3.2 billion
ZURICH (Reuters) -The Swiss National Bank posted an annual loss of 3.2 billion Swiss francs ($3.62 billion) for 2023, the central bank said on Monday, as the switch to positive interest rates cost it dearly.
The central bank made a loss of 8.5 billion francs on its Swiss franc positions, mainly caused by paying out interest to the sight deposits it holds for commercial banks overnight.
The SNB switched to positive rates in September 2022 to fight resurgent inflation after a long period of negative interest rates, and has had a policy rate of 1.75% since June last year.
The SNB made a profit of 4 billion francs from its foreign currency positions, although earnings and valuation gains from its stock and bond portfolio were significantly reduced by the appreciation of the Swiss franc during the year.
The central bank also made a valuation gain of 1.7 billion francs on the 1,040 tonnes of gold it holds.
The 2023 result, which confirmed the SNB’s provisional forecast in January, was an improvement from the record 132.5 billion franc loss the central bank posted in 2022.
($1 = 0.8828 Swiss francs)
(Reporting by John Revill, Editing by Rachel More)
The Swiss National Bank (SNB) is the central bank of Switzerland, responsible for the country's monetary policy and ensuring price stability.
Positive interest rates occur when the central bank sets rates above zero, allowing banks to earn interest on deposits, which can help control inflation.
A foreign currency position refers to the financial exposure a bank or investor has in currencies other than their home currency, impacting profits based on exchange rate fluctuations.
A valuation gain is an increase in the value of an asset, such as stocks or bonds, often due to market appreciation or favorable economic conditions.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and often prompting central banks to adjust interest rates.
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