Well, they trade this stuff, so my guess is that they sold some stuff that has made money (German bonds, maybe some gold, etc). At the same time, they didn't have to intervene aggressively. What is most interesting is that they have managed to diversify a lot of their EUR risk into other ccies (mostly USD & GBP).
Erm, you appear to be forgetting that the SNB is a central bank. Yes, it's a somewhat unusual in that it actually sorta kinda softly marks to market. However, in reality it doesn't. Furthermore, you can't just look at the exchange rates and imagine that this is the only part of the SNB PNL. After all, you have to recall that the SNB doesn't actually sit on piles of EUR, USD etc. It actually invests the cash in short-dated govt bonds. Have you seen the performance of short-dated govt bonds recently? Moreover, these bonds carry nicely. Then there's seigniorage, of course.Diversifying into the USD and the GBP has also been a disaster for the SNB.
27.8% of ( Currency breakdown of foreign currency investments, including derivatives, excluding investments and liabilities in connection with foreign exchange swaps
) is in US dollars.
BUT, the USD/CHF has fallen significantly since 15th March, so the SNB is also taking even more losses on their USD holdings
Only 4.7% of ( Currency breakdown of foreign currency investments, including derivatives, excluding investments and liabilities in connection with foreign exchange swaps
) is in GBP. so the impact of the rising GBP/CHF is minimal
Overall, the SNB is taking enormous losses on both its EUR and USD investments in its attempts to soften the Swissie and keep its manufacturing industries alive. How long they can justify that tactic is the big question.
The German government ends up with the cash. You tell me whether those profligate, inflation-loving Germans are gonna cause a problem.
Well, they issued the bonds, innit? So they collected the money upfront, so to speak... That's what matters.
Yeah, and then they reinvest back into more Schatz.
