(Bloomberg) -- With Czech inflation returning to the target and policymakers calibrating the pace of further monetary easing, Governor Ales Michl is pushing ahead with his other plan — to make the central bank profitable.

A long-term koruna appreciation — by 48% against the euro over the past 25 years — saddled the central bank with a long string of accounting losses on its vast foreign-currency reserves.

To reverse the trend, the bank is changing its investment strategy to increase the expected average annual return on the reserves to about 4% from an earlier long-term average of about 2.6%, Michl said in an interview on Tuesday. 

Over the next five years, he wants to ramp up the share of stocks to 30%, while also boosting gold holdings to 100 metric tons from about 40 tons now.

“The bank’s strategy will be to make gradual purchases and we won’t be trying to time the market,” he said. “The same approach will apply to buying gold.”

Michl, whose six-year term as governor ends in 2028, acknowledged that the need to conduct an effective monetary policy takes precedence over considerations about the central bank’s own financial results. 

Still, he hopes the new approach to balance sheet management will help his successor achieve profitability and the bank might eventually be able to make contributions to the state budget.

“Assuming the primary goal of price and financial stability is met, my secondary, longer-term goal is to make the central bank profitable,” he said. “It’s hard to say yet whether that will happen during my term.”

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