MNB: Banking sector liquidity falls in May
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Hungarian banksʼ average holdings of three-month deposits, the main instrument used by the National Bank of Hungary (MNB) to control liquidity, fell by HUF 54.2 billion to HUF 2.270 trillion in May from the previous month, showing a drop in the sectorʼs forint liquidity, data released by the MNB today show, according to Hungarian news agency MTI.
Stock of the three-months deposits fell even though banks could no longer avail of the MNBʼs two-week deposits, which were phased out at the end of April.
Stock of the two-week deposits stood at zero in May, down from HUF 271.5 bln in April.
The MNB announced earlier that it was replacing the two-week deposits with the three-month deposit as its main tool for soaking up liquidity.
The data show the average stock of external assets edged down HUF 18.2 bln to HUF 8.772 tln, but the end-of-month stock dropped by HUF 220.7 bln to HUF 8.622 bln from April to May. The MNB attributed the latter decline to a maturing Swiss franc government bond and the issue of euro-denominated government bonds targeted at retail investors.
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