Swiss Central Bank Lifts Minimum Reserve Requirement
(RTTNews) - The Swiss National Bank raised the minimum reserve requirement for domestic banks, which is set to reduce its payout.
The SNB lifted the minimum reserve ratio to 4 percent from 2.5 percent.
The bank also made changes to how it calculates the minimum reserve requirements.
The SNB said liabilities arising from cancellable customer deposits will be fully included in the calculation of the minimum reserve requirement. The changes will take effect on July 1.
"These adjustments will ensure that implementation of the SNB's monetary policy remains effective and efficient," the SNB said.
"Since sight deposits which are held by banks to meet minimum reserve requirements are not remunerated, the interest costs for the SNB will be reduced," the bank added. These amendments will not affect the current monetary policy stance.
As reserve requirements are not remunerated, the changes will reduce the central bank's interest payment.
Last month, the Swiss National Bank unexpectedly reduced its benchmark rate and became the first major central bank to ease the policy in the current cycle. The policy rate was cut by 25 basis points to 1.5 percent.
The policy rate cut was intended to support economic activity and to ensure appropriate monetary conditions.
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