Swiss National Bank cuts rates on overnight deposits as interest costs soar

ZURICH, Oct 30 - The Swiss National Bank on Monday said it will reduce the amount of interest it pays commercial banks for money deposited with it overnight after costs soared with the end of its negative-rate regime and efforts to stem the rise of the safe-haven franc.

In Switzerland, sight deposits held to meet minimum reserve requirements will no longer be remunerated from Dec. 1. "The changes have no impact on the current monetary policy stance," the SNB said."These adjustments will ensure that monetary policy implementation remains effective and will reduce interest costs for the SNB," it added.

With excess deposits earning 50 bps less than the policy rate, banks will have an incentive to lend in the money market, contributing to higher activity and supporting the transmission of monetary policy, he added.

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