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Central bank posts gains on high gold prices

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Central bank posts gains on high gold prices
09:20 CET+01:00

The Swiss central bank said on Monday that high gold prices helped to lift its nine-month profits to 5.8 billion francs ($6.7 billion) despite massive losses on some of its foreign currency positions.

"The gold price and current interest rate situation have resulted in high valuation gains on gold and fixed interest rate investments," said the bank in a statement.

With the gold price reaching 47,089 francs per kilogramme at the end of September, the bank's gold reserves recorded a valuation gain of 5 billion francs.

By contrast, its foreign currency positions brought in net results of just 0.3 billion francs as the strength of the franc against major currencies such as the euro and US dollar led to losses of 4.7 billion francs.

To halt the rise of the Swiss currency against the euro, the bank on September 6th announced a 1.20 franc minimum exchange rate.

In its first earnings statement since that move, data from the Swiss central bank showed that its foreign currency investments jumped significantly to reach 305.28 billion francs at the end of September 2011.

This was an increase of 101.47 billion francs from the end of 2010, when the foreign currency investments were at 203.81 billion francs.

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