For the second consecutive year the Swiss National Bank closes the budget in the red. The operating loss for 2023 is in the order of 3 billion francs (around 3,23 billion euros), lighter than that of 2022 of 132 billion of francs. As a consequence of this, the Swiss central institute will also not be able to pay money to this year Confederation e Cantons, nor give dividends to private shareholders.
The SNB is controlled by the cantons, but is listed on the Zurich Stock Exchange. The institute's mandate is to guarantee price and currency stability: therefore distributing profits is not officially its task, but it is custom that the SNB often makes profits and distributes them by making substantial payments to the Confederation, as well as to the Cantons. In the last twenty financial years, including 2023, the institute has closed its annual accounts thirteen times with profits and seven times with losses.
What went wrong: 8,5 billion loss on franc position
In the 2023 budget there is no shortage of positive signs: on positions in foreign currency a profit of around 4 billion francs was recorded, while from gold reserves a capital gain of 1,7 billion emerged. But it's on positions in francs that the greatest loss is detected, equal to 8,5 billion.
In recent years, the SNB has found itself faced with a infernal plot: interest rates-inflation-strong franc. For a long time it had kept negative rates to curb a franc which when it strengthens too much hinders Swiss exports. But with the increase of inflation in 2022 the central bank had to change its strategy and started, like all other central banks, to increase the rates, while the franc has resumed its upward path, also to act as a barrier against the importation of inflation.
Inflation target achieved
The SNB succeeded in its aim of lowering the consumer prices, but had to pay more to the banks that deposited funds with it: and hence the worsening of the franc positions. Furthermore, currency positions, although still positive and substantial, also decreased, precisely due to the rise in the franc. At the end of 2023, equity capital was around 63 billion, compared to a balance sheet close to 800 billion.
Looking forward to the next moves in 2024
Also for the SNB the 2024 it could be the year of a reversal of the trend in monetary policy, returning to reducing the cost of money and we will have to see how it will move in that intertwining of interest rates-inflation-strong franc.
In December inflation on an annual basis in Switzerland it was 1,7%, up from 1,4% in November, but for the whole of 2023 the percentage was 2,1%, a sharp decline compared to 2,8, 2002% in 0. The SNB aims for inflation between 2%-2023%, a target already achieved in some months of 2024 and which is now very close for the average for the whole of XNUMX.
