SNB cuts limit for banks to get full interest on parked cash

The Swiss National Bank (SNB) will lower the threshold factor for remunerating sight deposits – making a minor adjustment to how much interest banks earn for parking cash with it. The factor determining which part of lenders’ sight deposits accrues the full SNB interest rate will be cut to 22 times their minimum reserve requirement, down from 25 times now, according to a statement published Monday. Switzerland’s central bank increased minimum requirements from July – a step that lifted the amount up to which full interest of 1.25% is earned, since the upper threshold is a multiple of the minimum holdings. Monday’s move partially reverses this by reducing the multiplication factor. From June: SNB cuts key interest rate to 1.25% Sight deposits held as minimum reserves earn no interest, while holdings in excess of the threshold are remunerated at the SNB’s policy rate, discounted by a half-point. That amounts to 0.75% at present. The action announced Monday won’t significantly change ...