ZURICH (Reuters) – Sight deposits held by the Swiss National Bank increased last week, data showed on Monday, in a possible sign the central bank has resumed its foreign currency purchases to restrain the rising Swiss franc.
Economists urged caution interpreting the data, saying the return of cash to bank accounts after pre-Christmas withdrawals by customers could be another reason for the increase.
The SNB, which has long used foreign currency purchases and negative interest rates as the foundation of its expansive monetary policy, declined to comment.
But increases to sight deposits – cash which commercial banks store with the central bank overnight – are normally seen as a proxy for foreign currency purchases.
For the week ending Jan. 7 total sight deposits rose to 724.631 billion Swiss francs ($787.47 billion), the SNB said on Monday, up from 722.771 billion francs a week earlier.
The figure had previously been stuck at the 722 billion level since Dec. 10.
“I would be cautious in interpreting this as interventions. In the past years we have always seen a clear seasonal pattern with lower deposits towards the end of the year and higher deposits in January,” J.Safra Sarasin economist Karsten Junius said.
The Swiss franc is currently trading at 1.0426 francs per euro and at 0.9205 francs per dollar, according to Refinitiv data.
SNB Chairman Thomas Jordan said last month that despite indications the SNB had halted currency interventions as a way to stem the franc’s rise, it remained willing to intervene “if necessary”.
The SNB has taken a more relaxed approach to the franc’s recent rise as higher inflation in the eurozone than in Switzerland has reduced the negative effect of the safe-haven currency’s rise.
Exporters said the euro and the dollar remain by far the most important currencies in terms of purchasing as well as sales, according to a Credit Suisse (SIX:CSGN) study published on Monday.
The 1,100 companies questioned expect the euro-franc rate to weaken to 1.08 by the end of the year, while the dollar-franc rate will move sideways to around 0.93 dollars to the franc.
($1 = 0.9202 Swiss francs)
Swiss National Bank sight deposits see first big rise in a month
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