DislikedIf sight deposits are invested in foreign currencies and contain mainly German and French bonds, how is this reflected in SNB's CHF denominated sight deposits?
E.g. if EUR/CHF rises or when interests on bunds fall, would this not trigger a rise of sight deposits in CHF?
So if SNB stops buying bunds, their interests may go up and SNB might need to write off in their sight deposits even though they did not intervene?
I'm no expert, please tell me when I'm wrong. Thanks.Ignored
Due to this inflow, CHF will strengthen & SNB has to 'print' more CHF to buy EUR to offset & balance this inflow (Sight Deposit increase), so as to maintain the floor. The amount of EUR purchase may also indirectly come from these Sight Deposits from commercial Swiss banks via SNB.
But one thing I don't understand is that any non-Swiss opening a Swiss bank account can choose to deposit any form of currency into Switzerland.
For example I can choose open a EUR or USD-base account in any Swiss bank and deposit in that currency other than CHF. How does that tally into CHF sight deposits & strengthening?