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Banking sector liquidity down in September

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Forint liquidity of Hungaryʼs banking sector fell in September from a month earlier, with the average stock of credit institutionsʼ overnight, three-month and other deposits decreasing, the National Bank of Hungary (MNB) said Thursday in a report on its statistical balance sheet based on preliminary data.  

The average stock of overnight deposits of credit institutions fell by HUF 11.2 billion to HUF 911.5 bln in September, state news wire MTI reported. Meanwhile, the average balance of credit institutionsʼ accounts with the MNB fell HUF 6.7 bln to HUF 193 bln. 

The average stock of three-month deposits, earlier the MNBʼs main sterilization instrument, fell by a further HUF 90.5 bln to HUF 395 bln. The MNB introduced limits to the volume of three-month depo placements in October 2016. 

The average stock of forint liquidity provided by the MNB to banks through EUR/HUF swaps rose HUF 35.5 bln to HUF 64.5 bln in September. The MNB introduced these swaps parallel with the limitation of the three-month depo facility to provide forint liquidity to banks.   

Among the central bankʼs assets, the average stock of its one-week loans to credit institutions fell HUF 18.1 bln to HUF 22.6 bln. 

The MNBʼs average stock of external assets fell by HUF 12.6 bln to HUF 7,455.8 bln. In an end-of-month comparison, transactions reduced external assets by HUF 55.8 bln, but the weakening of the forint raised them in forint terms by HUF 138.4 bln. The stock rose HUF 82.6 bln to HUF 7,519 bln at the end of September.

The September expiry of FX swaps allocated in relation to the conversion of retail FX loans into forints reduced the stocks only moderately, the MNB noted.

The average stock of the MNBʼs foreign liabilities fell HUF 8.3 bln to HUF 819.2 bln, while the end-of-month stock rose HUF 15.6 bln to HUF 751.8 bln, reflecting almost exclusively the weakening of the forint. 

The average stock of central government deposits was down by HUF 52.7 bln to HUF 928.8 bln.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded the mandatory reserve requirement by HUF 6.6 bln. In September, reserve requirements totaled HUF 186.4 bln.

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