SNB sight deposits reach record high

Bloomberg

Swiss National Bank (SNB) data suggest it pumped 3.8 billion francs ($3.9 billion) into markets last week to control the franc, sending its sight deposits to a record high.
With the franc at its strongest since 2017 against the euro, sight deposits at the SNB have increased over the past month, suggesting the central bank is making good on its long-running pledge to wage interventions, in conjunction with a -0.75% deposit rate, to keep the currency from appreciating.
The amount of cash commercial banks hold with the SNB hit an all time peak of 589.3 billion francs last week, data published on Monday showed.
Still, while last week’s rise was the biggest since March 2017, it’s a relatively small increase compared to other episodes, such as in early 2015 or following the UK’s Brexit referendum in 2016, when the SNB has admitted to interventions.
Fears about the global economy have piled pressure on the haven franc, as has the prospect of additional monetary stimulus. According to Bank of New York Mellon strategist Neil Mellor, since the start of August, the institution’s iFlow data “registered some of the biggest flows into the currency this year.”
Pressure on the franc could intensify more in coming weeks, given that the European Central Bank is seen cutting its deposit rate as early as September. That could prompt the SNB to slash rates as well, to maintain the yield spread with euro-area assets.