Brussels, 19/03/2004 (Agence Europe) - The European Central Bank (ECB) made a net loss of 477 million euros in 2003 due to the drop in the dollar against the euro and worldwide low interest rates. This is the second loss in its short existence, following a hole of 247.3 million euros in 1999. In 2002, the ECB made a profit of 1,22 billion euros. "This loss is essentially due to the evolution of exchange rates which adversely affected the value, expressed in euro, of the bank's holdings of US dollar-denominated assets, but also to lower domestic and foreign interest rates" stated the ECB in a press release on Thursday.
The strong euro resulted in net unrealised exchange rate revaluation losses of almost 4 billion euros. The ECB's regular income is derived primarily from investment earnings on its holding of foreign reserve assets and its paid-up capital of 4.1 billion euros and - since the beginning of 2002 - from interest income on its 8% share of the euro banknotes in circulation. Ever ready to give lessons in budgetary orthodoxy to governments in the eurozone, the ECB tried to lead by example last year: administrative expenses on salaries and related costs, rental of premises and goods and services amounted to 286 million euros, compared to 372 million in 2002.