MNB allots HUF 250 bln in EUR/HUF swap tenders


MNB headquarters in Budapest (Image by Jessica Fejos)

The National Bank of Hungary (MNB) allotted a combined HUF 250 billion of one, three, six and twelve-month forint swaps against euros at a tender on Monday, the central bank website shows, as reported by state news wire MTI.

With HUF 200 bln of swaps expiring on the August 9 value day, forint liquidity injected into the system through the swaps will rise by HUF 50 bln to HUF 950 bln on Wednesday.

The MNB allotted HUF 50 bln of one-month swaps, in line with its original offer, and HUF 50 bln less than the expiring HUF 100 bln on the maturity. Bids totaled HUF 53 bln.

The MNB accepted HUF 100 bln of the HUF 103 bln bids submitted for three-month swaps. The allotment was double the original tendered volume and was in line with the HUF 100 bln swaps expiring on Wednesday.

The central bank allotted the originally offered HUF 50 bln of six-month EUR/HUF swaps against demand of HUF 143 bln on Monday.

The MNB also offered and allotted HUF 50 bln of twelve-month swaps at the Monday tender. Bids totaled HUF 143 bln.

The central bank introduced the tenders for the FX swaps last autumn as a "fine-tuning instrument" for market liquidity after it put a cap on placements in three-month deposits, its main sterilization instrument.

On Wednesday, the total stock of the swaps will rise to HUF 950 bln, including HUF 200 bln of one-month, HUF 350 bln of three-month, HUF 250 bln of six-month, and HUF 150 bln of twelve-month swaps.

The MNB said it continuously observes liquidity trends and stands prepared to hold further tenders for the instruments if it sees "substantial and lasting" deviations.


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