MNB allocates HUF 75 bln of MIRS to flatten yield curve
Photo by Jessica Fejos
The National Bank of Hungary (MNB) allocated HUF 75 billion of monetary policy interest rate swap (MIRS) instruments at the first tender for the facility designed to flatten the yield curve on Thursday, state news wire MTI reported.
MNB policy makers decided in November to launch the monetary policy interest rate swap (MIRS) facility, setting a HUF 300 bln allocation for the first quarter of 2018. Unlike interest rate swaps conditional on lending activity that the central bank offered earlier, the new MIRS facility is unconditional.
At the tender on Thursday, the central bank allocated HUF 35.0 bln of five-year MIRS and HUF 40.0 bln of ten-year MIRS. The allocation of the five-year swaps was in line with the announced offered amount, but the allocation of the ten-year swaps was more than double the HUF 15.0 bln announced amount.
Lendersʼ bids came to HUF 295.6 bln for the five-year swaps, and HUF 277.5 bln for the ten-year swaps.
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 1.03% on Thursday. The ten-year benchmark yield was 2.05%.
The central bank will hold the tenders for the floating rate-paying MIRS facility every other Thursday.
MNB policy makers also decided in November to start buying up to 70% of lendersʼ mortgage bonds to bring long-term interest rates down.
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