March 31, 2015 / 3:00 PM / 5 years ago

UPDATE 1-Czech central bank shifts euro holdings into other currencies

* Large shift from euro to other currencies

* Exposure to Canadian dollar more than doubles

* Overall reserves higher after 2013 interventions (Adds details on portfolio)

By Jason Hovet and Jan Lopatka

PRAGUE, March 31 (Reuters) - The Czech central bank sharply increased holdings of currencies other than the euro and U.S. dollar in its foreign exchange reserves last year, the bank’s annual accounts showed on Tuesday.

The reserves jumped at the end of 2013 when it bought 7.5 billion euros worth of foreign currency in interventions to weaken the crown, with aim of fighting deflation risks and reviving price growth as the economy limped out of recession.

The bank reallocated part of its reserves in 2014 into other currencies, including increased holdings in Canadian and Australian dollars and the Swedish crown.

Euro assets remained the biggest part of the bank’s reserves, but their proportion dropped to about half at the end of 2014 from around two thirds in 2013, according to financial statements.

“The most significant change from the point of view of currency composition of the foreign currency reserves was a reallocation of a part of the EUR portfolio, increased during interventions in November 2013, in favour of CAD, AUD and SEK currencies,” the bank’s yearly report said.

The bank had already held part of its reserves in the three currencies, as well as British pounds and Japanese yen.

The bank did not comment on the reason for the rebalancing of the foreign exchange assets. It will release more information on the make-up of reserves in May.

The bank’s total assets amounted to 1.27 trillion Czech crowns, or $55.5 billion when calculated with the end-2014 exchange rate. These are mostly in foreign reserves, which stood at 1.24 billion crowns at the end of December 2014, according to previously released data.

The portion exposed to euro dropped to 628.81 billion crowns at the end of 2014 from 748.18 billion crowns the year before, according to financial statements accompanying Tuesday’s report.

The U.S. dollar exposure followed with 213.84 billion crowns worth, from 177.16 billion.

Canadian dollar exposure jumped to the equivalent of 145.79 billion crowns from 57.66 billion crowns. Australian dollar exposure doubled to 80.62 billion crowns while Swedish crown exposure grew to 46.99 billion crowns from 28.71 billion crowns.

Swiss franc exposure reached 45.21 billion crowns in 2014 after the franc was not listed in comparable 2013 holdings.

About 60 percent of total assets were in coupon-yielding bonds.

The central bank also said it earned a profit of 56.56 billion crowns in 2014 and that it would go toward covering past losses and increasing a reserve fund. (Editing by Alison Williams)

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