ZURICH (Reuters) – Switzerland ran a current account surplus of 16 billion Swiss francs ($17.40 billion) in the first quarter of 2021, 6 billion francs more than in the year-earlier quarter, the Swiss National Bank said on Tuesday.
“The rise was mainly attributable to two factors. First, goods trade recorded a significantly higher receipts surplus than in the same quarter of 2020. Second, the expenses surplus in secondary income declined due to the decrease in claims expenditure by private insurance companies,” the central bank said in a statement.
The weakening of the Swiss franc against the dollar since the start of 2021 led to an 100 billion franc quarter-on-quarter increase in Switzerland’s net international investment position to 761 billion francs.
Stocks of assets rose by 260 billion francs, outweighing the 160 billion franc increase in liabilities. A weaker franc versus the dollar means the value of assets held in the greenback is higher when translated back to the Swiss currency.
“On both sides the rise in stocks was due to exchange rate effects – especially towards the end of the period, the U.S. dollar was considerably higher against the Swiss franc,” the SNB said.
“This had a particularly strong impact on the assets side due to the high proportion of foreign currencies,” it added.
The SNB cited valuation gains on the Swiss stock exchange for the increase in liabilities. Since the start of the year the blue-chip Swiss Market Index has gained 11.4%, while the dollar has gained 3.9% versus the franc.
Reserve assets, an indication of the SNB’s currency interventions, rose by 35 billion francs during the quarter. As well as foreign currency purchases, the increase reflects the higher value of foreign currencies, stocks and bonds held by the central bank.
The SNB, which declined to comment on its interventions on Tuesday, is due to give details of its first-quarter foreign currency purchases on June 30.
($1 = 0.9195 Swiss francs)
(Reporting by John Revill, Editing by Michael Shields)