The MNB started allowing the early close of the FX swap contracts already in April, although it limited the volume to 20% of the total or €1.8 bln in absolute terms.
The MNB noted that its international reserves had grown even as the countryʼs short-term external debt fell, allowing it to make the option available to lenders. Allowing the FX swap contracts to be closed early will not affect the long-term path of the international reserves, the central bank said.
The MNBʼs international reserves stood at €36.645 bln at the end of April.
The MNB allotted last November about €6.39 bln of the swaps in an unconditional facility and an additional €1.66 bln in a conditional facility. The MNB said at the time that the amount would meet nearly all of banksʼ FX liquidity needs related to the conversion.
The MNB earlier agreed with banks to provide €9 bln from its international reserves to fully meet their FX liquidity needs related to the conversion, while lenders committed to acquire the necessary FX from the central bank rather than from the market.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
