There's a significant decline in overall sight deposits held at the SNB over the past few weeks, which runs against the norm that we have been used to for the longest of time. Typically, this figure tends to balloon as it is a proxy signal of intervention by the SNB to try and smooth out the appreciation in the franc over the years - preventing the currency from running too high, too quickly.
However, we've seen a sudden drop now in overall sight deposits - more specifically from other sight deposits held by the central bank. The latest weekly figure shows another CHF 20 billion decline. So, what gives?
Looking closer to what may be the cause, it seems like the SNB is doing some work in the repo market by selling bills/repos as a way to steer the Swiss Average Rate Overnight (SARON) towards 0.50% - which is the existing policy rate of the central bank. Why is that the case? Well, for simple reasons is that the SARON is used as a benchmark for Swiss repo transactions i.e. funding purposes.
The chart above doesn't seem to be that coincidental now, though it also ties together with the SNB's latest policy decision towards the latter stages of September here.