Strong Swiss currency causes major loss for central bank

The Swiss central bank on Friday reported a loss of 23 billion Swiss francs (22.9 billion dollars) for 2015, due to appreciation of the national currency and a drop in the gold price.

The bank stopped defending a minimum franc exchange rate against the euro in January 2015, leading to a stronger franc. Foreign currency assets held at the Swiss central bank lost value relative to the franc as a result.

While the depreciation of these assets had led to a loss of 50.1 billion francs for the central bank in the first half of last year, the annual loss turned out to be smaller as the euro and dollar strengthened in the second half of the year.

In addition to currency affects, the central bank recorded a loss of 4 billion francs on its gold reserves last year.

After scrapping the minimum exchange rate of 1.20 francs per euro, the currencies were valued equally for a short period at the beginning of 2015. On Friday, the franc traded at 1.087 against the euro.

The central bank made a record profit of 38 billion francs in 2014.

Last update: Fri, 08/01/2016 - 12:56
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