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ZURICH: The Swiss National Bank made a profit of 26.9 billion Swiss francs ($30.20 billion) during the first quarter, the central bank said on Thursday, as the value of its gold and foreign currency investments increased at the start of the year.

The bank made a profit of 24.2 billion francs from its foreign currency positions and 4.3 billion from an increase in the value of the gold it holds.

The result will come as a relief to the SNB, which posted a loss of 132.5 billion francs for 2022 overall, the biggest in its 115-year history.

In the latest results, the SNB’s foreign currency gains were derived from interest of 2.5 billion francs paid on the bonds it holds and 900 million francs in dividends from its stock portfolio.

Its also reported a valuation increase of 8.5 billion francs on its massive bond holdings while its equities holdings, which include stakes in most large US companies, increased by 14.7 billion francs in value, the SNB said.

Exchange rate losses of 2 billion francs, mainly due to the strengthening of the Swiss franc against the dollar, reduced the value of gains from its foreign investments when translated back into francs.

Making a profit is not part of the mandate of the SNB, which aims to ensure price stability in Switzerland while paying attention to economic development. Still, the central bank will have been relieved from a monetary policy perspective, UBS economist Alessandro Bee said.

“The SNB’s losses last year were due to a stagflationary environment where both bonds and equities lost value,” he said.

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“That is the hardest condition for monetary policy – does the central bank raise rates to tackle inflation but weaken economic growth, or does it cut rates and forget about inflation? “That’s a terrible dilemma, and I think the SNB will be glad this phase seems to have passed.”

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