MNB: Banking sector liquidity grows in December

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Forint liquidity of Hungaryʼs banking sector rose in December from the previous month, as seen in a rise in the stock of the National Bank of Hungaryʼs (MNB) main sterilization instrument, according to data released by the central bank today, Hungarian news agency MTI reported.

Average monthly stock of the instrument, the three-month deposit, rose HUF 930.1 billion to HUF 2.948 trillion. At the same time, stock of the two-week deposit instrument, which the MNB is phasing out, fell by HUF 616.2 bln to HUF 1.245 tln.

The MNB attributed a big drop in the average current account balances of financial institutions – by HUF 250.3 bln to HUF 363.1 bln – to the introduction of a fixed 2% reserve ratio from December 1, replacing a flexible reserve requirement system.

The monthly average of the banking sectorʼs current account balances with the MNB exceeded reserve requirements by HUF 11.3 bln, which the central bank termed “moderate” compared to the total reserve requirements of HUF 351.7 bln.

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