Banks place HUF 100 bln in 3-month deposits at capped tender
The National Bank of Hungary (MNB) accepted placements of HUF 100 bln in its three-month deposits for banks at a tender on Wednesday, the first such tender with a limit, Hungarian news agency MTI reported.
Banks bid to place HUF 314 bln in the facility, the central bankʼs main liquidity sterilization instrument.
The tender was the first at which the MNB placed a limit on the amount of placements, setting the cap at HUF 150 bln.
Introducing the cap is one of several measures the MNB has taken to move banksʼ liquidity out of central bank instruments and into government securities or the lending market.
From August, it reduced the frequency of tenders for the three-month deposits from once a week to once a month.
Total placements in the three-month deposits have been limited to HUF 900 bln for the fourth quarter.
After the tender on Wednesday, the total stock of three-month deposits fell by HUF 112 bln to HUF 1,174 bln, as HUF 222 bln of the deposits matured.
The next tenders for the deposits will take place on November 23 and December 21, the MNB said on its website. The central bank will make a decision on the placement limit for the first quarter of next year on December 20, it added.
"The [MNB] aims to ease monetary conditions and provide a corresponding degree of support to the economy through a decline in money market rates. The Monetary Council is making every effort to ensure that the limit imposed on the stock of three-month deposits exerts its expected easing effect efficiently," the central bankʼs policy-makers said after a rate-setting meeting on Tuesday.
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