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MNB: Banking sector liquidity falls in March

Telco

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The forint liquidity of Hungaryʼs banking sector fell in March from the previous month as was reflected in a decline of deposits with the central bank, the National Bank of Hungary (MNB) said in a monthly report today, Hungarian news agency MTI reported.

The report shows average monthly stock of three-month deposits, the MNBʼs main sterilization instrument, fell HUF 97.6 billion to HUF 2.96 trillion. Average stock of two-week deposits, which the MNB is phasing out in favor of the three-month deposit, were down HUF 260.4 bln at HUF 635.3 bln. Average stock of overnight deposits slipped HUF 39.7 bln to HUF 107.3 bln.

The MNB said that banksʼ excess reserves were “moderate”, adding up to HUF 8.9 bln, compared to a total reserve requirement for the sector of HUF 347.1 bln.

Average stock of external assets was down HUF 340.3 bln at HUF 9.991 tln. The MNB noted that the decline affected mainly international reserves.

The MNBʼs international reserves fell almost €4.2 bln to €27.6 bln in March, the MNB said earlier in April. In a note attached to the data, the MNB said FX transactions, mostly related to a maturing GBP bond, reduced the international reserves by almost €1.2 bln, while redemption of central bank swap contracts related to the phasing out of retail FX loans reduced the level of international reserves by €2.9 bln. It attributed a smaller part of the decline to a fall in ÁKKʼs margin account with the MNB related to cross-currency exchange rate changes.

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