(News Bulletin 247) – Due to a heavy loss, the Swiss central bank will not make any distributions to the Swiss cantons this year.

The Swiss central bank (SNB) suffered a record loss of 132.5 billion Swiss francs (133 billion euros) in 2022 due to the tremors in the financial markets, it announced on Monday. The SNB has slightly increased its first estimate for January and confirms in a press release that it is eliminating payments to the Confederation and the cantons.

“This loss makes any distribution for the 2022 financial year impossible,” she said in the press release, detailing the final figures for the past year.

The SNB usually gives them part of its profit. In 2021, it had made a profit of 26.3 billion Swiss francs and had paid them a total of 6 billion francs.

But with the strong shocks on the financial markets since the invasion of Ukraine, the Swiss central bank suffered a heavy loss of 131.5 billion francs on its investments in foreign securities, it indicates in the press release.

Decision on rates at the end of the month

Its stock of gold, which remained unchanged, saw its value increase by 0.7%, generating a capital gain of 408.5 million francs.

But its positions in francs also suffered a loss which amounted to 1 billion francs.

To conduct its monetary policy, the Swiss central bank relies on a large portfolio of investments that includes gold, stocks and bonds. For seven years, it had pursued an ultra-accommodative monetary policy in order to combat the overvaluation of the Swiss franc through a negative interest rate, supplemented by market interventions to limit the appreciation of its currency, which caused its foreign currency reserves to swell.

But with the acceleration of inflation, it changed course in the middle of the year last year and gradually raised its rates. In December, its key rate was raised to 1% at its last quarterly monetary policy meeting. It is due to announce its next rate decision on March 23.

(With AFP)