ISTANBUL (AA) – The Netherlands’ central bank announced that it suffered from a $3.7 billion loss in 2023, related to the European Central Bank’s (ECB) persistently high interest rates to combat inflation.
“As interest rates were raised, our interest expense went up, whereas interest income barely increased,” according to a De Nederlandsche Bank report released on Friday.
“From 2029 onwards, however, we expect to return to profitability. We will then initially seek to restore our buffers in the first few years, before distributing dividends to the Dutch State,” it said.
“However, our expectations about restoring our buffers are subject to considerable uncertainty,” it said. “
This is because our cumulative losses are highly dependent on interest rate developments, and they could still exceed our capital and reserves, as previous projections have shown.”
The ECB raised its interest rates by 450 basis points since July 2022, as bank officials kept interest rates at restrictive levels to dial back inflation to the 2% target.
These hikes lead to increased interest expenses for central banks, while interest income from bonds remained stagnant, resulting in reported losses.