The value of the SNB’s gold holdings slid 15 billion Swiss francs ($16.6 billion) in 2013, the Zurich-based central bank said.
Gold plunged 28 percent in 2013, in its second-worst percentage decline since 1900 and its worst showing since 1981. It was the first time since 2000 that the precious metal failed to rise in value by the end of the year.
That caused the Swiss National Bank to write down the value of its 1,040 metric tons in gold holdings. The central bank held 37.8 billion Swiss francs worth of gold at the end of November 2013, according to the bank’s website. That’s still just a fraction of the $435.8 billion in foreign currency reserves it holds.
Most central banks own gold to boost confidence in their paper currency or protect against financial shocks, and are less concerned with the metal’s performance.
The SNB, one of the world’s biggest holders of gold, said the paper loss would force it to cancel dividends to shareholders for the first time since it was founded in 1907. The central bank also said it wouldn’t be able to make additional payments to Switzerland’s 26 cantons, which are similar to U.S. states, and the federal government for the first time since 1991.
The losses could dim a popular push for more domestic gold holdings.
Last year, Switzerland’s seven-member ruling Federal Council, which includes the president and other ministers, said they opposed a plan contained in a popular referendum that would require Switzerland’s central bank to keep at least 20 percent of its assets in gold and all of those on Swiss soil.