By Ed Frankl
The Swiss National Bank reported a multibillion franc loss for the second-straight year, hampered by tight monetary policy.
The loss was 3.2 billion Swiss francs ($3.62 billion), broadly in line with early estimates made in January, but considerably lower than the 2022 loss of CHF132.5 billion, the SNB said Monday.
The main driver was losses from its Swiss-franc positions, which came to CHF8.5 billion, largely due to interest payments of deposits. The SNB hiked its key interest rate twice in 2023.
That offset profit from foreign-currency positions, which amounted to CHF4.0 billion. It was a large swing from the CHF131.5 billion loss of the prior year, which was driven by a downturn in financial markets in 2022.
Meanwhile, gold holdings gained in value by CHF1.7 billion, and operating expenses were around CHF400 million, the SNB said.
The result means the SNB again won't make a payout to the Swiss state and regional cantons.
After rising from minus 0.75% in 2022 to the current 1.75%, Switzerland's key rate will likely tick down later this year. Some economists say the SNB could cut its interest rates as early as this month. Swiss annual inflation ticked down to 1.2% in February, from 1.3% in January, in data also published Monday, well within the 0-2% target of the central bank.
The SNB's Chairman Thomas Jordan made a surprise announcement last week that he would quit at the end of September.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
03-04-24 0342ET
