The Swiss National Bank reported on Friday a net profit of CHF21.3 billion ($21.76 billion) during the first six months of 2016, boosted by strong returns from its foreign currency investments and the rising gold price.
Switzerland’s central bank booked gains of CHF7.6 billion from its gold holdings and CHF13 billion from its foreign currency positions.
The SNB has been buying currencies as well as foreign bonds and equities in massive amounts to check upward pressure on the highly-valued franc – nearly a return to its policy of buying unlimited quantities between 2011 and 2015.
“The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets,” a statement noted. Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result, it added.
The 2016 half-year figures contrast with the record loss of CHF 50.1 billion in the first six months of 2015. At that point, the SNB recorded a loss on its foreign currency positions of CHF47.2 billion francs, as the franc appreciated against the euro.
This followed the SNB’s decision on January 15, 2015 to abolish its ceiling on the Swiss franc of 1.20 per euro.
Before then, and starting with the September 6, 2011 decision to impose the ceiling, the SNB had repeatedly said it would enforce this minimum rate with the utmost determination and was prepared to buy foreign currency in unlimited quantities.