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SNB: Tweak to Threshold Factor is Neutral for MonPol Stance

SNB

SNB adjusts the remuneration of sight deposits, lowering the threshold factor from 25 to 22, effective as of 1st October 2024.

Full SNB release here: https://www.snb.ch/en/publications/communication/press-releases/2024/pre_20240819

  • What this effectively means is that more sight deposits are remunerated at the SNB policy rate minus a discount.
  • The SNB are conducting this move in order to ensure monpol remains effective and the transmission mechanism isn't hampered by minimum reserve requirements rising (which they're expected to do over the coming three years)
  • This is considered neutral for monpol purposes, as the higher minimum reserve requirement is countered by the lower threshold factor.

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