Banking sector liquidity narrows in June

Telco

Forint liquidity of Hungaryʼs banking sector narrowed in June from a month earlier, which was mainly reflected in a decrease in the average stock of one-day deposits, the National Bank of Hungary (MNB) said in a report based on preliminary data on Thursday.   

The average stock of overnight deposits fell HUF 101.7 bln to HUF 1,155.9 bln, according to state news wire MTI. The average stock on bank accounts held with the MNB fell HUF 3.3 bln to HUF 230.2 bln, while banksʼ other deposits with the central bank fell HUF 32.2 bln to HUF 18.4 bln. 

The end-of-month and average stock of three-month deposits, previously the main sterilization instrument of the MNB, remained at HUF 75 bln.

The MNBʼs average stock of external assets was up HUF 243.9 bln at HUF 8,309.9 bln. The stock of external assets stood at HUF 8,547.7 bln at the end of June, down from HUF 8,649.7 bln at the start of the month, dropping mainly on the expiry of FX-denominated bonds, the central bank noted.

Meanwhile, the website of the Government Debt Management Agency (ÁKK) shows that EUR 1.3 bln of ten-year bonds expired on June 11.  Transactions decreased the end-of-month stock by HUF 342.2 bln, while revaluations and other factors increased it by HUF 240.2 bln. 

The weakening of the forint raised, in forint terms, both the average and end-of month stock of external assets, the MNB noted.

The average stock of central government deposits was up HUF 50.5 bln at HUF 1,002.1 bln in June. The stock stood at HUF 951.3 bln at the end of the month, down HUF 446.8 bln. About one quarter of the drop was in the governmentʼs FX deposits, to HUF 293.9 bln. 

In June, the central bank concluded one, three, six and 12-month transactions with credit institutions at the EUR/HUF FX swap tenders providing forint liquidity. On balance, the total average stock of swaps rose HUF 262.5 bln in the month to HUF 2,055.3 bln.  

The average stock of currency in circulation continued to rise during the month and reached HUF 5,587.9 bln by its end, MTI noted.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded reserve requirements by HUF 20.1 bln, it added, up from the previous month. In June, reserve requirements amounted to HUF 210.1 bln.

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