The loss meant the central bank will not make its usual payout to the Swiss central and regional governments.
The Swiss National Bank has posted an annual loss of $143 billion (132 billion Swiss francs) in 2022, the biggest in its 115-year history.
The provisional figure posted by the bank on Monday came as falling stock and fixed-income markets hit the value of its share and bond portfolio. A strengthening Swiss franc also had a negative impact.
Marking a reverse from a 26 billion franc profit in 2021, teche loss in 2022 is far bigger than the previous record of 23 billion francs chalked up in 2015. It is equivalent to slightly more than the annual GDP of Morocco.
The SNB will release detailed annual figures on March 6.
It made a loss of 131 billion francs from its foreign currency positions – the more than 800 billion francs in stocks and bonds it bought during a long campaign to weaken the Swiss franc.
Annual loss for Swiss National Bank precludes profit distribution https://t.co/ojtmmeJljd
— Swiss National Bank (@SNB_BNS) January 9, 2023
‘High reputation helps’
Global stock markets weakened and bond prices fell last year as central banks around the world, including the SNB, hiked interest rates to combat inflation.
The strong Swiss franc – which rose above parity against the euro in July – led to exchange rate-related losses.
The only positive was the SNB’s gold holdings which stood at 1,040 tonnes at the end of 2021 and gained 400 million francs in value during 2022.
The 2022 loss meant the central bank will not make its usual payout to the Swiss central and regional governments, it said. Last year the SNB paid out 6 billion francs.
Still, the loss is unlikely to have an impact on SNB policy. It hiked interest rates three times in 2022 as Chairman Thomas Jordan moved to stem high Swiss inflation, analysts said.
“The SNB’s colossal losses will not change its monetary policy at all,” said Karsten Junius, an economist at J.Safra Sarasin.
“The high reputation of the SNB helps that it doesn’t have to change anything.”
($1 = 0.9252 Swiss francs)