The soaring value of the Swiss franc against the euro has led Switzerland’s central bank to report a first half loss of 50bn francs (£33bn).
The bank, which is owned by the Swiss federal government, said the loss could affect its ability to pay a dividend this year.
Those dividends are traditionally used to pay for public services.
Switzerland shocked markets in January when it abandoned its four-year currency peg to the euro.
The move saw the Swiss franc skyrocket in value as investors piled into the currency over fears of a renewed eurozone debt crisis despite the imminent onset of quantitative easing by the European Central Bank (ECB).
The continued strength of the Swiss franc is hurting exports from the country which are down 2.6% this year. The tourism industry has also reported fewer visitors and retailers are also struggling.
The first-half loss was almost entirely – 47.2bn francs – the result of losses on foreign exchange positions, which occurred in the weeks that immediately follow the bank’s decision to remove the currency peg against the euro.
Since ending the 1.20 francs per euro cap, the Swiss National Bank (SNB) has intervened in the currency market by buying euros to weaken the franc, which currently hovers at around 1.06 francs per euro.
The bank, which also has several private shareholders, warned that its full-year results would rely heavily on developments in the gold, foreign exchange and broader financial markets.
“Strong fluctuations are therefore to be expected, and only provisional conclusions are possible as regards the annual result,” the central bank said in a statement.
The SNB said euro-denominated assets made up 42% of its investment portfolio at the end of June, unchanged from the end of March, and 32% was held in US dollars, also unchanged.
Peter Hegglin, the head of Switzerland’s 26 canton finance directors, said he was “not going to assume” that the first half loss would mean the SNB would not be paying a full year dividend, suggesting the bank could still reverse its fortunes.