MNB to limit three-month deposit tenders
Photo by Jessica Fejos
The National Bank of Hungary (MNB) said it will reduce the frequency of tenders for its three-month deposits, its main sterilization instrument, and limit the amount of bids it accepts, Hungarian news agency MTI reported yesterday.
The tenders will be announced once a month, on the Wednesday following the Monetary Councilʼs policy meeting, instead of once a week, from August, the MNB said. From October, a limit will be imposed on the placements in the three-month deposits, it added.
A decision on the deposit limit will be taken in September. The first tender day the limit will be in force is October 26.
“The targeted, unconventional measures will support the MNBʼs schemes to stimulate bank lending and its self-financing program by directing bank liquidity,” the MNB said.
The measures aim to crowd out excess liquidity in the three-month deposit, causing that money to flow into the interbank market and government securities, it explained.
The MNB acknowledged the measures would lead to adjustments by banks, and said it would monitor the situation on a continuous basis, in particular with a view to its deposit and lending facilities, BUBOR movements and developments on the government securities market.
The MNB may “fine-tune” the operations depending on the actual adjustments by banks, it added.
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