Banking sector liquidity up, 3-month depos phased out in Dec


Forint liquidity of Hungaryʼs banking sector rose in December 2018 from a month earlier, which was mainly reflected in the increase in the average stocks of overnight deposits, the National Bank of Hungary (MNB) said in a report on Monday based on preliminary data, state news agency MTI says in a report.

The average stock of overnight deposits rose by HUF 151.6 billion to HUF 919.4 bln.

The end-of-month stock of three-month deposits, previously the main sterilization instrument of the MNB, was down by HUF 25 bln at HUF 0 bln with the average stock down by HUF 27.2 bln at HUF 14.5 bln.

MNBʼs average stock of external assets was up by HUF 431.8 bln at HUF 9,100 bln. The stock of external assets stood at HUF 9,441 bln at the end of December, up from HUF 8,631 bln at the start of the month. 

Transactions increased the stock of external assets by HUF 834.4 bln and revaluations and other factors reduced it by HUF 24.5 bln.

Assets rose, mainly due to transfers from the EU and, to a lesser extent, to the issuance of foreign currency bonds by the Government Debt Management Agency. The appreciation of the forint exchange rate had a downward effect on the end-of-month stock of external assets.

The average stock of central government deposits was down by HUF 7.8 bln at HUF 1,135.9 bln in December. The stock stood at HUF 1,396.6 bln at the end of the month, up from HUF 1,311.7 bln.

In December, MNB concluded one-, three-, six- and twelve-month transactions with credit institutions at the EUR/HUF FX swap tenders providing forint liquidity. In December the level of expiring swap transactions was fully renewed.

The average stock of currency in circulation continued to rise during the month and reached HUF 6,117 bln by the end of it.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded reserve requirements by HUF 36.3 bln. In December reserve requirements amounted to HUF 222.4 bln.

From December 19, 2018 reserve requirements have been the MNBʼs key policy instrument, replacing the three-month central bank deposit.

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