Swiss central bank posts massive loss on soaring franc

ZURICH: The Swiss central bank said Thursday it had posted loss of 30 billion francs in the first quarter due to a jump in the franc's value which led to huge exchange rate-related losses.

Losses on foreign exchange positions alone amounted to 29.3 billion francs (27.8 billion euros, $31 billion), the Swiss National Bank said.

In a shock move, the bank on January 15 decided to scrap a currency cap of 1.20 francs to the euro, sending the franc soaring.

This eroded its investments denominated in foreign currencies, dominated by the euro, causing a hit of 41 billion Swiss francs.

But interest and dividend income helped to offset some losses, as they rose by 1.6 billion francs and 0.3 billion francs respectively.

The bank also benefitted from the buoyant stock market, leading to a gain of $6.2 billion in shares and related instruments held.

The value of its gold reserves also dropped by one billion francs.