The Swiss National Bank reported a loss of 2 billion Swiss francs ($2.27 billion) in Q2, attributed to the rising value of the Swiss Franc, which diminished gains from foreign currency investments, the central bank announced on Wednesday.

This loss compared to a Q1 profit of 58.8 billion Francs, and was despite gains in valuation of the central bank’s gold and equity portfolios.

During the quarter, the SNB gained 3.26 billion Francs from the increased value of its 1,040 tonnes of gold, driven by rising prices due to global political tensions.

Foreign currency positions, the 740 billion Francs worth of stocks and bonds held by the SNB, reported a loss of 3.10 billion Francs, due to the higher value of the Franc and declining bond prices offsetting the gains from rising global equity markets.

The SNB also incurred a loss of 2.06 billion Francs on its Swiss Franc positions, primarily due to paying interest on sight deposits held by commercial banks.

Despite this loss, it is unlikely to be a significant concern for the SNB, Reuters reports, as generating profit is not part of its mandate; the central bank's primary focus remains on maintaining price stability.

“The SNB’s financial result depends largely on developments in the gold, foreign exchange and capital markets,” it stated.

“Strong fluctuations are therefore to be expected.”

Furthermore, UBS economist Florian Germanier suggested that the increasing value of the Franc could influence the SNB's results in the upcoming months.

“We expect the Franc to strengthen as other central banks cut rates and because of geopolitical tensions adding to the safe haven flows into the currency, which is a significant risk for the SNB's results for the rest of the year,” he commented.