Demand for the National Bank of Hungary (MNB)’s three-month floating rate EUR/HUF swaps dropped to €162 million from an all-time high of €624 million on June 20 at the weekly tender on Monday. Bids, all accepted, were still at the second highest level since late December.
The MNB offered the usual maximum of €400 million three-month swaps at a maximum 224.12 swap points on Monday. The average accepted price moved between 220.00 and 224.00 and averaged 221.96 swap points. With €5 million in expiries, the outstanding volume will rise to €1.019 billion its highest level since late March, on the June 28 settlement day, Econews calculated.
On June 20 turbulence in the eurozone drove demand to the highest since the facility was introduced in March 2009, and it surpassed the available maximum for the first time since December 27, 2010, when bids totaled €410 million.
The stock reached an all-time high, of €1.922 billion at the end of 2010 as liquidity on the interbank swap market narrowed due to rising swap market spreads and seasonal factors. After no bids between February 14 and February 28, interest for the central bank three-month EUR/HUF swaps revived in March and was varied in April and May before picking up again in June.
The MNB started to offer three-month floating-price EUR/HUF swaps and six-month fixed-price EUR/HUF swaps to banks weekly in March 2009. The fixed-price six-month EUR/HUF swap facility ran out as planned by the end of 2010. The bank also offered one-week CHF/EUR swaps weekly between February 2009 and January 2010.
The bank has been operating one-day FX swaps daily since October 2008. The swap facilities were launched to ease Hungarian banks’ access to FX financing.
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