ZURICH: The Swiss National Bank posted an annual loss of 3.2 billion Swiss francs ($3.62 billion) for 2023, the central bank said on Monday, as the switch to positive interest rates cost it dearly.

The central bank made a loss of 8.5 billion francs on its Swiss franc positions, mainly caused by paying out interest to the sight deposits it holds for commercial banks overnight.

The SNB switched to positive rates in September 2022 to fight resurgent inflation after a long period of negative interest rates, and has had a policy rate of 1.75% since June last year.

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The SNB made a profit of 4 billion francs from its foreign currency positions, although earnings and valuation gains from its stock and bond portfolio were significantly reduced by the appreciation of the Swiss franc during the year. The central bank also made a valuation gain of 1.7 billion francs on the 1,040 tonnes of gold it holds.

The 2023 result, which confirmed the SNB’s provisional forecast in January, was an improvement from the record 132.5 billion franc loss the central bank posted in 2022.