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Banking sector liquidity narrows further

Telco

The forint liquidity of Hungary’s banking sector narrowed further in October from a month earlier, mainly reflected in a decrease in the average stocks of one-day deposits, the National Bank of Hungary (MNB) said in a report based on preliminary data on its website.

Forint liquidity of the sector has been narrowing now for six months in a row. The average stock of money in circulation rose by a further HUF 44.6 billion to HUF 5.86 trillion. One-day interbank interest rates remained at the bottom of the interest rate corridor throughout the month.

The average stock of overnight deposits of credit institutions fell HUF 160.9 bln to HUF 712.5 bln. The average stock on banks’ accounts held with the MNB rose HUF 50.6 bln to HUF 287.3 bln, while that of banks’ other deposits with the MNB rose HUF 5.8 bln to HUF 17.2 bln.

The average stock of three-month deposits, earlier the main sterilization instrument of the MNB, dropped HUF 12.1 bln to HUF 62.9 bln. In an end-of-month comparison, the stock dropped HUF 25 bln on transactions to HUF 50 bln.

The MNB’s average stock of external assets rose by HUF 114.3 bln to HUF 8.56 tln, raised by transfers from the European Commission, among others, the MNB said.

Transactions raised the end-of-October stock by HUF 201.4 bln, while revaluations and other changes raised it by HUF 135.1 bln from the start of the month to HUF 8.65 tln.

Average external liabilities of the central bank fell HUF 17.5 bln in October to HUF 835.9 bln, but rose HUF 21.8 bln from the start to the end of the month. The average stock of central government deposits rose by HUF 186.1 bln in a month to HUF 1.198 tln.

The MNB has kept the outstanding stock of the EUR/HUF FX swap tenders it operates to provide forint liquidity unchanged now for five months in a row. The monthly average of the banking sector’s current account balances with the MNB exceeded reserve requirements by HUF 64.8 bln. Reserve requirements amounted to HUF 222.5 bln in October.

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