Results showed this has come at a considerable cost to the central bank, which posted its biggest quarterly loss on record in April and warned its shareholders, which include the federal government and cantons, that it may mot be able to maintain its regular payout policy.
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Switzerland’s central bank announced Friday it had suffered a loss of 50.1 billion francs ($51 billion, 47 billion euros) in the first half of the year, down on the 16.1 billion francs in profit logged for the same period a year earlier. Today, the bank reported a whopping 50-billion-franc loss for the first half of 2015 (pdf), the largest such deficit in its history. This could prove problematic she said, given the economic slowdown in Switzerland. The bank also recorded a 3.2 billion franc loss on its gold holdings, which are denominated in dollars.
The move saw the Swiss franc skyrocket in value as investors piled into the currency over fears of a renewed eurozone debt crisis despite the imminent onset of quantitative easing by the European Central Bank (ECB). The shock move sent the currency skywards, threatening the export-dependent Swiss economy.
The discontinuance of currency ceiling in January lifted the value of Swiss franc and in turn led to exchange rate-related losses on all investment currencies.
The SNB cautioned its results rely heavily on developments in the gold, foreign exchange and broader financial markets.
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“Only provisional conclusions are possible as regards the annual result, the bank said in a statement on Friday”.
