"The floor rate will remain in force as long as necessary to carry out our mandate of maintaining price stability"
- SNB governing board member Fritz Zurbruegg
The amount of cash held by the nation's commercial banks and the central bank inched higher last week, adding to signs that investors are getting less anxious over the Eurozone's financial woes. Sight deposits of domestic banks, which constitute a huge part of the liquidity in the banking sector, jumped to 277 450 million francs in the week ending June 21, up from 274 706 a week earlier. As the Swiss Franc was approaching parity versus the shared currency in August 2011, the SNB decided to flood the money market with cash and pushed total sight deposits to 200 billion, introducing a cap on Euro a month later.
Earlier this month a report showed that the Swiss National Bank's foreign-currency reserves soared to a record high in May, after being almost stable for almost eight months, as the Swiss Franc lost ground against the Euro and U.S. Dollar. The report showed that holdings, which are calculated according to IMF standards, jumped to 441.4 billion francs up from a revised 436.1 billion francs in April. Reserves edged higher, boosted by valuation effects and not by new purchases. At the end of the first quarter the SNB held 48% of its reserves in single currency, 27% in U.S. Dollars and only 9% in Japanese Yen.
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