Swiss Central Bank lost $3.5bn to interest rate hikes

The Switzerland Central Bank said it recorded a loss of over three billion Swiss francs or $3.5bn last year on the back of its interest rate hikes.

The loss, as reported by the AFP on Tuesday, means the country’s government and cantons will not receive their annual pay-out from the Swiss National Bank for a second year in a row.

“Like other central banks worldwide, the SNB has raised its interest rates out of negative territory to tame inflation.

“This meant that the SNB had to pay interest to banks parking their money at the central bank,” the bank said.

Previously, it was the banks that had to pay interest on the money they had to deposit at the SNB as the rates were in negative territory.

The SNB said, “It had a loss of 8.5 billion francs on national currency positions last year. It made a profit of four billion francs on foreign currency positions.

“Its gold holdings recorded a valuation gain of 1.7 billion francs.

“The central bank posted a record loss of 132.5 billion francs in 2022.

“It will post definitive figures for 2023 on March 4.”

AFP

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]