The decision to extend the maturity of the IRSs – the MNB already has three- and five-year maturities – was taken after consulting with banks, the MNB added. The MNB launched the three- and five-year IRSs a little more than a year ago as one of several measures to draw banksʼ liquidity away from the central bank and into forint government securities in an effort to boost the share of forint-denominated government financing.
The central bank earlier cut off direct access to its main sterilisation instrument by non-residents, and it announced that the maturity of the instrument would be extended from two weeks to three months from September. That measure is expected to reduce the central bank deposit stock from HUF 5,000 bln-5,500 bln to HUF 1,000 bln by the end of 2015.
There are almost HUF 550 bln of the IRSs outstanding at present, but more than HUF 90 bln has been added to the stock since the MNB announced early in June the replacement of its two-week deposits with three-month ones, showing banks are already starting to adjust to the change, the central bank noted.
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