As of 21 February 2025, the Swiss National Bank (SNB) reported total sight deposits at CHF 438.1 billion, an increase from CHF 432.5 billion previously.
On 24 February 2025, domestic sight deposits reached CHF 430.2 billion, up from CHF 424.4 billion.
This resurgence in Swiss sight deposits marks the highest levels seen since just before Christmas, although it follows a trend of declining deposits in previous weeks.
Liquidity levels within the Swiss banking system have started to rebound after weeks of declines. With total sight deposits climbing to CHF 438.1 billion, there’s a clear indication that liquidity is returning to the system. Domestic sight deposits also moved higher, reaching CHF 430.2 billion, reinforcing this trend. This suggests a shift in positioning among financial institutions, which may have implications for monetary conditions in the near term.
For those monitoring monetary policy, this movement provides insight into how the Swiss National Bank may be managing liquidity. The rise in deposits could signal that liquidity injections have been made, or that previous outflows are reversing. Given that these deposits had been declining in earlier weeks, the recent increase suggests that demand for francs has changed.
It’s worth noting that sight deposits can reflect interventions or changes in central bank operations. When these balances grow, it often indicates more liquidity in the financial system. When they shrink, it suggests tightening conditions. Keeping an eye on these fluctuations can offer clues about the SNB’s stance and how financial institutions are responding.
Short-term volatility in funding markets can also be linked to these deposit shifts. The return towards higher balances—last seen in December—may suggest that earlier liquidity pressures are easing. If this trend continues, it could affect expectations around funding rates and broader financial conditions.
Changes in sight deposits can also influence currency markets. The Swiss franc has had periods of strength in recent months, and rising liquidity levels could hint at shifts in positioning. If deposit levels keep climbing, it may point to adjustments that traders should watch closely.
Watching how these numbers move in the coming weeks will provide a clearer picture of whether this is a temporary reversal or the beginning of a longer adjustment. If deposits continue to trend upwards, it might suggest that financial institutions are adapting to changing conditions in a way that could affect capital flows.
