The Czech National Bank (CNB) has reported changes to its international reserve management following the termination of external mortgage backed securities (MBS) investment mandates in the third quarter of 2026. MBS investments may now be made through exchange traded funds (ETFs) and derivatives within internally managed bond portfolios. Corporate bond investments may also now use ETFs and derivatives.
The MBS change aims to increase flexibility in managing the composition of international reserves, while the corporate bond change seeks to raise their expected long term returns. Actively managed reserve portfolios had a market value of EUR 147.1 billion and a weighted average return of 4.93% over the latest four quarters, measured in reserve currencies. MBS represented 0.3% of reserves, while the reported corporate bond allocation was 0.0%.