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Swiss sight deposits rise, add to signs of SNB intervention
February 9, 2015 / 9:47 AM / 3 years ago

Swiss sight deposits rise, add to signs of SNB intervention

ZURICH, Feb 9 (Reuters) - The amount of cash commercial banks hold with the Swiss National Bank (SNB) crept up last week, signalling that the central bank has intervened to weaken the franc since removing the cap on the currency versus the euro.

The central bank last month scrapped the 1.20-per-euro cap it imposed in September 2011, surprising financial markets. Maintaining the policy would have cost the bank 100 billion francs ($108 billion) in January alone, the SNB later said.

In the week ending Feb. 6, sight deposits rose to 384.889 billion Swiss francs, SNB data showed on Monday, from 383.325 billion the previous week.

A SNB spokeswoman declined to comment on Monday when asked whether the central bank had intervened.

Sight deposits - which can be freely transferred or converted into cash - measure the amount of money commercial banks hold with the SNB.

SNB Chairman Thomas Jordan said at the weekend the bank is prepared to intervene in foreign exchange markets and has room to push interest rates further into negative territory, if necessary, to weaken the franc.

Jordan declined to say on Saturday whether the SNB had intervened recently, though data last week showing Switzerland’s foreign exchange reserves hit a record high in January also pointed to interventions.

The SNB has attempted to discourage new flows into francs - viewed as an ultra-safe investment - by imposing an interest rate of -0.75 percent on some cash deposits.

($1 = 0.9235 Swiss francs)

Reporting by Alice Baghdjian; editing by John Stonestreet

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