ZURICH, June 20 (Reuters) - The level of Swiss sight deposits fell slightly, according to data published on Monday, indicating the Swiss National Ban
ZURICH, June 20 (Reuters) – The level of Swiss sight
deposits fell slightly, according to data published on Monday,
indicating the Swiss National Bank has dialled back its currency
market interventions that aimed to weaken the Swiss franc.
The total level of sight deposits — cash held overnight by
commercial banks with the SNB — fell to 751.83 billion Swiss
francs ($779.99 billion) last week from 753.08 billion francs.
Normally, an increase indicates that the SNB has been
selling newly created francs to the commercial banks, whose
accounts with the central bank increase as a result.
The operation has been a cornerstone of SNB campaign to
weaken the safe-haven franc in recent years, due to concerns the
currency’s high value was damaging Switzerland’s export-based
economy and contributing to deflation.
The SNB did not respond to a request for comment on Monday.
Last week the SNB changed tack, hiking its main interest
rate for the first time in 15 years and saying it would tolerate
the strength of the franc unless there was an “excessive
appreciation” of the currency.
SNB Chairman Thomas Jordan said the franc was no longer
highly valued, due to higher inflation in other countries.
Jordan’s fellow SNB governor Andrea Maechler said interest
rates were the SNB’s main tool to tackle rising inflation.
The decline in sight deposits did not surprise Karsten
Junius, an economist at J. Safra Sarasin.
“The SNB has made it overly clear that they do not intend to
intervene in the FX-market to prevent a stronger Swiss franc as
long as developments are smooth,” he said.
“Given their inflation forecast of above 2% in Q1 2025 it is
clear that a measured appreciation of the CHF would be welcome
by the SNB as it would help keep imported goods prices down.”
($1 = 0.9639 Swiss francs)
(Reporting by John Revill; Editing by Michael Shields)
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