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MNB allocates HUF 60 bln of MIRS at tweaked tender

Telco

Image by Jessica Fejos

The National Bank of Hungary (MNB) allocated HUF 60 billion of monetary policy interest rate swaps (MIRS) at the second tender for the instruments designed to flatten the yield curve on Thursday, state news wire MTI reported.

The tender was fine-tuned, based on the results of the first tender, to "strengthen monetary transmission." As announced earlier, the second tender was fixed-rate, instead of variable-rate, and allocations were linked to lendersʼ assets.

At the tender on Thursday, the MNB allocated HUF 10 bln of the five-year MIRS facility, and HUF 40.0 bln of ten-year MIRS, in line with the announced offered amounts.

Lendersʼ bids came to HUF 49.6 bln for the five-year MIRS, and HUF 103.2 bln for the ten-year swaps.

The fixed rate was 0.46% for the five-year MIRS and 1.17% for the ten-year MIRS.

At the first, variable-rate MIRS tender two weeks earlier, the average accepted fixed rate was 0.76% for the five-year swaps and 1.46% for the ten-year swaps.

The secondary market yield on the benchmark five-year government security was 1.33% on Thursday. The ten-year benchmark yield was 2.38%.

MNB policy makers decided to launch the MIRS facility last November, setting a HUF 300 bln allocation for the first quarter of 2018. The central bank is holding MIRS tenders every other Thursday.

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